Supreme Court Narrows Scope of NEPA Review

Environmental Impact Statements do not have to consider upstream and downstream effects.

Today the Supreme Court decided Seven County Infrastructure Coalition v. Eagle County, which challenged the U.S. Court of Appeals for the D.C. Circuit's capacious understanding of agency obligations under the National Environmental Policy Act. The justices unanimously rejected the D.C. Circuit's approach, but split 5-3 over what the D.C. Circuit did wrong. Justice Kavanaugh wrote for the Court, joined by the Chief Justice and the Court's conservative justices (other than Justice Gorsuch, who was recused). Justice Sotomayor wrote an opinion concurring in the judgment, joined by Justices Kagan and Jackson.

At first read, the biggest significance of this opinion is that it clarifies that NEPA does not require Environmental Impact Statements to consider upstream and downstream effects of projects that are caused by third-parties. This is particularly significant for infrastructure projects, such as pipelines or transmission lines, and should help reduce NEPA's burdens (at least at the margins). The opinion will also likely hamper any future efforts, perhaps by Democratic administrations, to expand or restore more fulsome (and burdensome) NEPA requirements.

Justice Kavanaugh's introduction does a nice job of laying out the issues and the Court's conclusions. Here it is:

Some 55 years ago, Congress passed and President Nixon signed the National Environmental Policy Act, known as NEPA. For certain infrastructure projects that are built, funded, or approved by the Federal Government, NEPA requires federal agencies to prepare an environmental impact statement, or EIS. The EIS must address the significant environmental effects of a proposed project and identify feasible alternatives that could mitigate those effects.

NEPA was the first of several landmark environmental laws enacted by Congress in the 1970s. Subsequent statutes included the Clean Air Amendments of 1970, the Clean Water Act of 1972, and the Endangered Species Act of 1973, among others.

Unlike those later-enacted laws, however, NEPA imposes no substantive environmental obligations or restrictions. NEPA is a purely procedural statute that, as relevant here, simply requires an agency to prepare an EIS—in essence, a report. Importantly, NEPA does not require the agency to weigh environmental consequences in any particular way. Rather, an agency may weigh environmental consequences as the agency reasonably sees fit under its governing statute and any relevant substantive environmental laws.

Simply stated, NEPA is a procedural cross-check, not a substantive roadblock. The goal of the law is to inform agency decisionmaking, not to paralyze it.

In this case, the U. S. Surface Transportation Board considered a proposal by a group of seven Utah counties for the construction and operation of an approximately 88-mile railroad line in northeastern Utah. Under federal law, the Board determines whether to approve construction of new railroad lines. The railroad line here would connect Utah's oil-rich Uinta Basin—a rural territory roughly the size of the State of Maryland—to the national rail network. By doing so, the new railroad line would facilitate the transportation of crude oil from Utah to refineries in Louisiana, Texas, and elsewhere. And the project would bring significant economic development and jobs to the isolated Uinta Basin by better connecting the Basin to the national economy.

For that proposed 88-mile Utah railroad line, the Board prepared an extraordinarily lengthy EIS, spanning more than 3,600 pages of environmental analysis. The Board's EIS addressed the environmental effects of the railroad line. But the U. S. Court of Appeals for the D. C. Circuit nonetheless faulted the EIS for not sufficiently considering the environmental effects of projects separate from the railroad line itself—primarily, the environmental effects that could ensue from (i) increased oil drilling upstream in the Uinta Basin and (ii) increased oil refining downstream along the Gulf Coast of Louisiana and Texas.

On that basis, the D. C. Circuit vacated the Board's EIS and the Board's approval of the 88-mile railroad line. As a result, construction still has not begun even though the Board approved the project back in December 2021.

We reverse. First, the D. C. Circuit did not afford the Board the substantial judicial deference required in NEPA cases. Second, the D. C. Circuit ordered the Board to address the environmental effects of projects separate intime or place from the construction and operation of the railroad line. But NEPA requires agencies to focus on the environmental effects of the project at issue. Under NEPA, the Board's EIS did not need to address the environmental effects of upstream oil drilling or downstream oil refining. Rather, it needed to address only the effects of the 88-milerailroad line. And the Board's EIS did so.

Justice Sotomayor's opinion concurring in the judgment reaches the same conclusion -- the Surface Transportation Board was not obligated to consider environmental effects caused by third parties that could not influence its decision -- but reached that conclusion by a different route. Her opinion begins:

The National Environmental Policy Act improves agency decisionmaking by requiring agencies to consider environmental impacts for which their decisions would be responsible. I agree with the Court that the Surface Transportation Board would not be responsible for the harms caused by the oil industry, even though the railway it approved would deliver oil to refineries and spur drilling in the Uinta Basin. I reach that conclusion because, under its organic statute, the Board had no authority to reject petitioners' application on account of the harms third parties would cause with products transported on the proposed railway. The majority takes a different path, unnecessarily grounding its analysis largely in matters of policy. Accordingly, I write separately to explain why the result in this case follows inexorably from our precedent.

Note that with the issuance of this decision, the only opinion left from the December sitting (indeed, the only opinion left from a case argued in 2024) is Skrmetti, and the only justices who have not written an opinion from the December sitting are Justice Thomas and the Chief Justice (and they are also the only two conservative justices to have only written two majority opinions thus far this term).  This makes me thing that the Chief Justice has that opinion, but we'll see.