The Nickel Report

On June 18, 2026, the Federal Energy Regulatory Commission (Commission) issued an order granting a certificate of public convenience and necessity to Eastern Gas Transmission and Storage, Inc. to add 550,000 dekatherms per day of firm transportation service on its system in Pennsylvania and Ohio through the “Appalachian Reliability Project.”¹ In the Certificate Order, the Commission determined that the National Environmental Policy Act (NEPA) does not require a discrete cumulative effects analysis.

Background

NEPA requires the preparation of an environmental impact statement for any “major Federal action significantly affecting the quality of the human environment.”² As amended by the BUILDER Act in 2023,³ such environmental reviews require consideration of, among other things, the “reasonably foreseeable environmental effects of the proposed agency action.”⁴

NEPA does not reference cumulative effects. Rather, the concept was recognized in early NEPA caselaw⁵ and ultimately codified in the Council on Environmental Quality’s (CEQ) 1978 regulations.⁶ Those regulations recognized three categories of effects—direct, indirect, and cumulative—and defined cumulative effects as:

[T]he impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.⁷

But for a brief period between 2020 and 2022, this tripartite “effects” regime endured for nearly 50 years. However, in February 2025, CEQ issued an interim final rule rescinding its NEPA regulations.⁸ On January 8, 2026, CEQ issued a final rule addressing public comments and adopting the interim final rule without changes.⁹ In parallel with the rescission, CEQ issued guidance to department and agency heads directing any required updates to agencies’ NEPA procedures to ensure compliance with the BUILDER Act and the administration’s NEPA priorities. In the absence of centralized CEQ regulations, NEPA is now implemented through each agency’s regulations and/or guidance.

The Commission has NEPA regulations¹⁰ and a guidance manual¹¹ that were revised and issued, respectively, in response to CEQ’s directives. Although the guidance manual is silent as to cumulative effects, the regulations contain several references.¹²

Commission’s Order

The relevant section of the Commission’s order begins by agreeing with the substance of Commission staff’s cumulative effects analysis in the Environmental Assessment but observes that NEPA does not contain any reference to cumulative effects and that CEQ rescinded its regulations defining and requiring consideration of cumulative effects.¹³ The Commission found that identifying cumulative effects as a separate and distinct category of impacts has proven to ultimately disserve NEPA goals of environmentally informed decision-making without imposing undue procedural burdens.¹⁴

Instead, the Commission recognized that NEPA requires an analysis of “the reasonably foreseeable effects of ‘the project at hand,’ not the effects of separate projects.”¹⁵ And although the effects of a given project may be shaped by other activities in the vicinity of the project, NEPA does not require consideration of such activities that is untethered to the project under review. Rather, such information will be relevant to the extent that it informs the Commission’s holistic and contextualized understanding of the instant project’s reasonably foreseeable effects.¹⁶

Commissioner Chang concurred in the result but wrote separately to explain her views on the issue and approach going forward. Relying on the Supreme Court’s 1976 opinion in Kleppe v. Sierra Club that noted “[c]umulative environmental impacts are, indeed, what require a comprehensive impact statement,” Commissioner Chang stated that the opinion has been cited extensively over the past 50 years for the proposition that NEPA requires analysis of reasonably foreseeable effects within the context of the environment in which a project exists.¹⁷ She states that, going forward, her review of a project’s impacts “will continue to be informed by contextualizing the project within the overall condition of the surrounding environment.”¹⁸

The Commission does not appear to jettison consideration of cumulative effects in their entirety as a practical matter, but rather only as an independent category of analysis.¹⁹ It remains to be seen how the Commission will delineate which activities in a project’s vicinity are relevant for the reasonably foreseeable effects analysis versus those where the causal chain is too attenuated. Seven County instructs that such line drawing exercises should receive substantial deference.²⁰ And, to the extent litigants attempt to rely on dated NEPA caselaw (e.g., cases decided prior to the BUILDER Act, CEQ’s recission rulemaking, Seven County, Marin Audubon,²¹ etc.), at least one judge on the D.C. Circuit has taken the position that much of the court’s “atextual NEPA precedent is no longer good law.”²²

[1] E. Gas Transmission & Storage, Inc., 195 FERC ¶ 61,218 (2026) (Certificate Order).

[2] 42 U.S.C. § 4332(C).

[3] Pub. L. No. 118-5, § 321, 137 Stat. 10, 38-46 (2023).

[4] 42 U.S.C. § 4332(C)(i).

[5] See, e.g., Scientists’ Inst. For Pub. Info., Inc. v. Atomic Energy Comm’n, 481 F.2d 1079, 1087-88 (D.C. Cir. 1973).

[6] See Implementation of Procedural Provisions, 43 Fed. Reg. 55,990 (Nov. 28, 1978).

[7] 40 C.F.R. § 1508.7.

[8] See Removal of National Environmental Policy Act Implementing Regulations, 90 Fed. Reg. 10,610 (Feb. 25, 2025).

[9] See Removal of National Environmental Policy Act Implementing Regulations, 91 Fed. Reg. 618 (Jan. 8, 2026).

[10] 18 C.F.R. pt. 380.

[11] Staff Guidance Manual on Implementation of the National Environmental Policy Act (June 2025).

[12] See 18 C.F.R. § 380.2(a) (defining “categorical exclusion” to omit actions that “individually or cumulatively have a significant effect on the human environment”); id. § 380.12(b)(3) (stating that each resource report for Natural Gas Act applications shall “identify…cumulative effects resulting from existing or reasonably foreseeable projects”); id. § 380.16(b)(3) (stating the same for section 216 Federal Power Act permits).

[13] Certificate Order, 195 FERC ¶ 61,218 at P 25.

[14] Id. (citing Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004)).

[15] Id. at P 26 (quoting Seven Cnty. Infrastructure Coal. v. Eagle Cnty., Colo., 605 U.S. 168, 182, 187 (2025)).

[16] Id.

[17] Id. at P 9 (Chang, Comm’r, concurring) (quoting Kleppe v. Sierra Club, 427 U.S. 390 at 413 (1976)).

[18] Id. at P 11.

[19] This could result in the Commission taking a similar approach as it did with environmental justice where it acknowledged that, although the operative executive orders were revoked, it would continue to fulfill its NEPA responsibility by considering impacts to all potentially affected communities. E.g., FFP Proj. 101, LLC, 194 FERC ¶ 61,054, at n.15 (2026).

[20] Seven County, 605 U.S. at 182.

[21] Marin Audubon Soc’y v. FAA, 121 F.4th 902 (D.C. Cir. 2024) (holding that CEQ’s regulations were ultra vires).

[22] See Appalachian Voices v. FERC, 139 F.4th 903, 927 (D.C. Cir. 2025) (Henderson, J., concurring).