This entry was authored by MGKF Summer Associate Ryan Raynor

Next term, the United States Supreme Court will decide the extent to which federal agencies must consider environmental impacts beyond their control in performing environmental reviews. On June 24, 2024, the Supreme Court granted certiorari to the Seven County Infrastructure Coalition and the Uinta Basin Railway, LLC to determine whether the National Environmental Policy Act (“NEPA”) requires a federal agency conducting an environmental impact statement (“EIS”) to study environmental impacts beyond the proximate effects of the action over which the agency has regulatory authority. Eagle Cnty., Colorado v. Surface Transportation Bd., 82 F.4th 1152, 1179 (D.C. Cir. 2023), cert. granted sub nom. Seven Cnty. Coalition v. Eagle Cnty., Co, 2024 WL 3089539 (U.S. June 24, 2024).

The dispute arose over the Surface Transportation Board’s (“STB”) approval of an 88-mile railroad spur in the remote Uinta Basin of Utah. The proposed railroad project is designed to connect the Uinta Basin’s natural resources, like oil, with existing rail infrastructure. Eagle County, Colorado and the Center for Biological Diversity challenged the STB’s approval of the project, arguing that, under NEPA, agencies are required to evaluate all foreseeable environmental impacts, including downstream effects like increased greenhouse gas emissions from oil refining and potential risks to water and wildlife from oil spills or train accidents along other rail routes that will see increased traffic. They contend that the STB's analysis fell short by not adequately considering these “foreseeable” impacts.

In reviewing the STB’s approval, the U.S. Court of Appeals for the D.C. Circuit ruled that under NEPA, agencies must take a “hard look” at both direct and indirect impacts within their regulatory purview. The ruling emphasizes that an EIS, under NEPA, should not hinge on what activities an agency directly regulates or whether another agency has authority. Rather, NEPA review requires agencies to consider all foreseeable environmental impacts that may result from the projects they approve, regardless of lacking direct regulatory authority over those impacts.

The D.C. Circuit's ruling diverged from the less stringent EIS standards held sufficient in five other circuits. The Third, Fourth, Sixth, Seventh, and Eleventh Circuits adhere to the interpretation set forth in Department of Transportation v. Pub. Citizen, which allows agencies to focus their environmental review only on impacts proximately caused by their regulated actions. 541 U.S. 752 (2004). This approach limits agencies' EIS responsibilities to effects they can directly influence or mitigate and does not require analysis of distant or indirect effects that fall under the purview of other regulatory bodies.

In addition to creating a more predictable environmental review process and resolving the split among circuits, the Supreme Court’s decision could have several other major implications. For example, the Court’s decision could impact the White House Council on Environmental Quality (“CEQ”), which under the Biden administration has taken the position that agencies should consider the potential climate change impacts of the actions they undertake. Even though no CEQ regulation is before the Court, the Court’s decision could narrow the scope of environmental review and conflict with the CEQ’s current climate change stance. A narrower EIS standard might also affect how the Federal Energy Regulatory Commission (“FERC”) approves new gas and energy projects under NEPA. Like the STB, FERC does not have any regulatory authority over upstream gas production or downstream uses. Hence, if the Court narrows the scope of environmental reviews to include only the proximate effects within the agency’s reach, then FERC would be allowed to approve pipelines without considering anything beyond a project’s direct effects.

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