Freight train on the railroad at sunrise. Aerial view

What’s Next For NEPA?

The U.S. Supreme Court last week scheduled oral arguments for December 10 in Seven County Infrastructure Coalition v. Eagle County, a highly anticipated case that focuses on whether a federal agency should be required to consider environmental effects that it does not have direct authority to regulate and that do not occur near the project itself. 

In other words, the court will determine whether the National Environmental Policy Act (NEPA) requires a federal agency to study environmental impacts beyond the proximate effects of the action over which the agency has regulatory authority. Therefore, the implications for how this decision could impact the extent to which agencies must weigh climate risks posed by major federal projects cannot be understated.

NEPA requires a federal agency undertaking a major federal action that significantly affects the quality of the human environment to take a hard look at the environmental consequences of that action. In 2020, the Seven County Infrastructure Coalition petitioned the Surface Transportation Board, which regulates the construction and operation of new interstate rail lines, to begin construction of a new rail line in Utah for the primary purpose of transporting waxy crude oil produced in the Uinta Basin. Prior to granting approval of the project, the Board was required to complete an Environmental Impact Statement to consider the environmental impacts of the proposed rail line. Following an expedited application process, the Board ultimately approved Seven County’s proposal in 2021.

However, Eagle County, Colorado and other environmental organizations challenged the Board’s decision in the U.S. Court of Appeals for the D.C. Circuit, arguing that the Board’s analysis under NEPA was deficient because it should have considered the potential environmental effects of the rail line’s increased drilling in Utah and Colorado as well as the oil refining activities taking place along the Gulf Coast, over 1,000 miles away. The Board countered that NEPA does not require it to consider those indirect impacts because the Board does not have the authority to prevent or mitigate these effects. The D.C. Circuit held that because the Board could have prevented these alleged environmental effects by denying Seven County’s application, it was required to consider the environmental effects of increased oil drilling and refining.

In June, the court granted Seven County’s petition for a writ of certiorari. Should the court ultimately determine that NEPA requires a narrower review, it may alleviate additional costs and long administrative review processes associated with Environmental Assessments and Environmental Impact Statements required under NEPA. On the other hand, should the court decide that NEPA mandates a much broader review, it may become easier for opponents of federal projects to delay and/or frustrate their approval. In particular, a broader ruling could have major implications for the Federal Energy Regulatory Commission when it considers how a new gas pipeline project will affect upstream and downstream greenhouse gas emissions.  Either way, the court’s decision will hopefully provide clarity on the scope of NEPA review.