On June 24, the Supreme Court granted certiorari review in a case with serious implications for those seeking federal permits which, in turn, require environmental impact statements under the National Environmental Policy Act (“NEPA”). NEPA is the most litigated federal environmental statute, and a key question has emerged resulting in more litigation, less certainty, and a split in the Federal Circuit Courts of Appeal: what are the “reasonably foreseeable environmental effects of the proposed agency action”, and do those effects encompass both upstream and downstream impacts which are not regulated by the agency itself. NEPA lawsuits challenging the adequacy of environmental impact statements are a much-used tool to delay, or in many cases, prevent projects from moving forward, and many of the challenges raising this question are in the context of energy infrastructure regulated by the Federal Energy Regulatory Commission. These lawsuits can take years to work their way through the judicial system, delaying what many argue are needed projects. On June 24, the Court agreed to consider the following question:
Whether the National Environmental Policy Act requires an agency to study environmental impacts beyond the proximate effects of the action over which the agency has regulatory authority.
What You Need to Know:
1. U.S. Supreme Court has agreed to review the scope of NEPA as applied to federal permit requests.
2. Environmental Impact Statements required under NEPA are a source of significant litigation and delay for many projects needing a federal permit.
3. The Court's decision should provide clarity on the scope of Environmental Impact Statements and potentially lessen the burdens; thereby reducing litigation and delay in at least some federal circuits.
Federal courts have split on the issue of how far a federal agency may go in considering environmental impacts associated with a particular permit request, with a majority of Circuit Courts of Appeal holding that an agency may only consider, and the associated economic impact statement need only address, the impacts caused directly by the requested permit. A few federal courts, though, including the D.C. Circuit Court of Appeals and the 9th Circuit Court of Appeals, have held that an agency must consider all environmental impacts which might arise, including those over which the agency has no control or authority. The difference in these two approaches can be, quite often, the difference between obtaining or not obtaining a permit.
In Eagle County Colorado v. Surface Transportation Board, 82 F.4th 1152 (D.C. Cir. 2023) the petitioners want to build an 88-mile railroad line to connect an isolated part of Utah with the national rail network. They received approval from the federal Surface Transportation Board, but opponents challenged the environmental impact statement for the project, claiming it did not consider things such as the environmental impact which oil and gas transported on the new rail line might have somewhere down the line. The Board responded that it could only consider the effects from the construction and operation of the rail line itself, and the that the use of oil and gas by purchasers of the products being shipped was not something the Board could regulate. The D.C. Circuit disagreed, stating: “The Board [] cannot avoid its responsibility under NEPA to identify and describe the environmental effects of increased oil drilling and refining on the ground that it lacks authority” and so required the Board to consider other environmental impacts, including the effects of refining the transported oil at other, federally regulated oil refineries located thousands of miles away.
The request to review the D.C. Circuit decision was supported by a number of trade associations and a Tribe, including the Interstate Natural Gas Association of America, the Liquid Energy Pipeline Association, the Center for LNG, the Natural Gas Supply Association, the American Gas Association, the American Forest Resource Council, the Ute Indian Tribe of the Uintah and Ouray Reservation, and the Western States and Tribal Nations Natural Gas Initiative.
With its decision, the Supreme Court will unify the judicial approach throughout the country and, potentially, could make clear that only the environmental impacts directly associated with the requested permit and within the federal agency’s authority to regulate may be properly a part of the environmental impact statement required by the NEPA. A final decision is expected next spring.
