Company: NINE
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001532286-25-000008
Chunk: 33

Company: Nine Energy Service, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 33
---
 Council on Environmental Quality announced its Phase I rule, the first of two planned rules to roll back the 2020 rule, which was finalized in April 2022. The Phase I final rule generally restores certain regulatory provisions that were in effect prior to the 2020 rule. In May 2024, CEQ finalized the Phase II rule, which accelerates NEPA reviews while maintaining consideration of relevant environmental, climate change, and environmental justice effects of a proposed project. Several states and environmental groups have challenged the Phase II rule in federal district court. The CEQ’s changes could result in increased NEPA review timelines for projects involving agency action regarding federal lands, federal funds, or federal permits or approvals. Additionally, in November 2024, a federal appeals court found that CEQ lacks statutory authority to issue NEPA regulations binding on other federal agencies. However, the court’s holding was confined to striking down the agencies’ action under review on separate grounds, and CEQ’s Phase I and II rules remain in effect. However, in January 2025, President Trump issued an executive order requiring CEQ to provide guidance on implementing NEPA and to propose rescinding and replacing CEQ’s NEPA regulations with implementing regulations at the agency level. The executive order also instructs federal agencies to adhere to only the relevant legislated requirements for environmental reviews and to prioritize efficiency and certainty over any other objectives in such reviews. In February 2025, CEQ sent an interim final rule to the White House Office of Management and Budget that would immediately withdraw the NEPA implementing regulations. The potential impact of further changes to the NEPA regulations and statutory text therefore remains uncertain and could have an effect on our customers’ business and operations, which could ultimately result in decreased demand for our services.

Endangered Species Act and Migratory Bird Treaty Act

The Endangered Species Act (“ESA”) was established to protect endangered and threatened species. Pursuant to that act, if a species is listed as threatened or endangered, restrictions may be imposed on activities adversely affecting that species or its habitat. The U.S. Fish and Wildlife Service (the “FWS”) must also designate the species’ critical habitat and suitable habitat as part of the effort to ensure survival of the species. In April 2024, the FWS finalized three rules that revise regulations regarding listing and reclassification of species and designation of critical habitat. These rules also clarify definitions that impact interagency cooperation and reinstated the general application of the “blanket rule” option for protecting newly listed threatened species