Policy Alert: Supreme Court Narrows Scope of Environmental Reviews

Action: On May 29, the Supreme Court issued a ruling to limit the scope of environmental review by Federal agencies under the National Environmental Policy Act (NEPA). The Court’s ruling determined that under NEPA, agencies are not required to analyze the indirect effects from project activities beyond that agency’s control or jurisdiction. This unanimous ruling bears significant implications for the future of environmental regulation, administrative agency authority, and infrastructure development.

Key Insights

• The 8-0 majority opinion (Justice Gorsuch recused himself) stated that the NEPA process, while important for producing factual determinations and details relevant for environmental review, is supported by a “purely procedural statute” that should focus on the specific scope of the project under review. Courts should afford deference to the agency’s administrative process assuming that the scope of its review is reasonably limited to the proposed action under review and not extended to speculative upstream or downstream effects.
• The case, Seven County Infrastructure Coalition v. Eagle County, centered on the US Surface Transportation Board’s (STB) approval of an 88-mile railway to transport crude oil from Utah’s Uinta Basin to the national rail network south to Gulf Coast refineries. While the STB originally approved the project in a 3,600 page environmental impact statement, the US Court of Appeals vacated that approval determining STB did not assess the “full potential for environmental harm against the transportation benefits it identified.” Now, the Uinta Basin railway has been reauthorized and poised to proceed.
• The National Environmental Policy Act (NEPA) of 1970 required that Federal agencies assess the environmental effects of their proposed actions and incorporate these considerations across planning and decision-making. The NEPA process results in the preparation of detailed assessments, known as Environmental Impact Statements (EIS) and Environmental Assessments (EA), that ultimately approve, delay, or halt the action under review.
• The NEPA process, overseen by the Council of Environmental Quality, relies on technical expertise at agencies and is one of the most time-consuming aspects of major projects. While previous Administrations and Congress have proposed reforms to this process, the current Administration’s Executive Order Unleashing American Energy sought to “expedite and simplify the permitting process” under NEPA and proposed rescinding existing regulations.
• This ruling may offer agencies greater discretion to limit the scope of NEPA reviews, with the courts now likely to defer to their determinations. Project developers may experience less burdensome approval processes and more expedited timelines to obtain approval and complete projects. While NEPA litigants such as environmental and community groups have used this process to delay or block approval, the burden to show assessments as insufficient may now be too difficult to overcome for many projects.