The U.S. Supreme Court appears poised to narrow the scope of environmental impact reviews, potentially affecting approvals for major projects like oil drilling and mining.

Rachel Frazin reports for The Hill.

In short:

Conservative justices questioned whether federal agencies should consider indirect, “remote” environmental impacts during reviews.

Justice Kavanaugh suggested courts have been too strict, leading to overly broad environmental assessments.

The case centers on a proposed Utah railway, with potential impacts on oil production and refining under debate.

Key quote:

“It’s going to be impossible for agencies to consider as many downstream and upstream effects just because of the procedural constraints.”

— Justice Amy Coney Barrett

Why this matters:

Narrowing environmental reviews under NEPA could speed up projects but reduce consideration of long-term harms, affecting air, water and climate. This shift may limit the federal government’s role in protecting the environment, impacting health and ecosystems nationwide.

Learn more: The Supreme Court to reconsider NEPA scope for environmental reviews

A train transports freight on a common carrier line near Price, Utah. (AP Photo/Rick Bowmer, File)

WASHINGTON — The Supreme Court backed a multibillion-dollar oil railroad expansion in Utah on Thursday, endorsing a limited interpretation of a key environmental law.

The unanimous decision comes after an appeal to the high court from backers of the project, which is aimed at quadrupling oil production in the remote area of sandstone and sagebrush. The backers said limiting the scope of environmental reviews under the National Environmental Policy Act would speed up development.

The case centers on the Uinta Basin Railway, a proposed 88-mile expansion that would connect oil and gas producers to the broader rail network, allowing them to access larger markets.

The justices reversed a lower court decision and restored a critical approval from federal regulators on the Surface Transportation Board. The project could still face additional legal and regulatory hurdles.

Environmental groups and a Colorado county had argued that regulators must consider a broad range of potential impacts when they consider new development.

WASHINGTON — In a win for business interests that chafe at burdensome environmental studies, the Supreme Court on Thursday gave a boost to a planned 88-mile railroad project that would transport crude oil in Utah.

The court ruled in favor of an alliance of local counties that support the project, called the Seven County Infrastructure Coalition, concluding that the federal environmental review process did not have to consider potential broader, indirect impacts.

The conservative-majority court was unanimous on the bottom line, although the three liberal justices differed on the reasoning. Conservative Justice Neil Gorsuch did not participate in the case.

The court ruled that consideration of broader downstream impacts of the project were not required under a federal law called the National Environmental Policy Act (NEPA).

Justice Brett Kavanaugh, writing for the court, said some federal judges have incorrectly applied NEPA and allowed it to be used as a broad weapon to challenge major development projects.

“NEPA has transformed from a modest procedural requirement into a blunt and haphazard tool employed by project opponents … to try to stop or at least slow down new infrastructure and construction projects,” he wrote.

This has the effect of delaying projects for years, Kavanaugh said.

“Fewer projects make it to the finish line. Indeed, fewer projects make it to the starting line,” he added. “Those that survive often end up costing much more than is anticipated or necessary.”

Although the coalition won at the Supreme Court, the project still has to undergo further review by the federal Surface Transportation Board before it can move forward.

The railroad would bring oil from the Uinta Basin in northeastern Utah by connecting the area to the national rail network.

The opposition to the project was led by Eagle County, Colorado, which claims it will suffer from downstream effects of the railroad, and several environmental groups.

The county’s lawyers said it would be directly affected by the project, with 9 out of every 10 trains that use the new railroad eventually passing through it on an existing line that runs along the Colorado River.

The Surface Transportation Board conducted an environmental review and gave the railroad the green light to move forward.

But the U.S. Court of Appeals for the District of Columbia Circuit found flaws in the analysis as well as other parts of the approval process, and in a 2023 ruling sent it back to the agency for further review.

The case arose as NEPA has faced criticism for unnecessarily slowing down major projects.

In 2023, then-President Joe Biden signed new legislation that sought to streamline the process. It requires agencies to only consider “reasonably foreseeable” climate impacts and limits reports to 150 pages.

Gorsuch stepped aside after the court had agreed to hear the case, citing the court’s ethics rules. Liberal groups and more than a dozen members of Congress had urged him to recuse himself over his previous links to billionaire Philip Anschutz.

One of Anschutz’s companies, Anschutz Exploration Corp., which drills for oil and gas, filed a brief in the case backing the coalition.

(Rick Bowmer | Associated Press) A train transports freight on a common carrier line near Price in 2023. The Supreme Court heard arguments Tuesday in a case about the proposed Uinta Basin Railway, which would connect to common carrier lines to transport waxy crude oil to refineries on the Gulf Coast.

The U.S. Supreme Court appeared open to diminishing the scope of how federal agencies consider environmental impacts Tuesday in a case centered on a proposed oil railway in northeastern Utah.

The 88-mile Uinta Basin Railway, if built, would connect the remote, oil-rich Uinta Basin to the rest of the country and refineries on the Gulf Coast. The railroad could quintuple the region’s oil exports, according to a 2021 environmental review.

The federal Surface Transportation Board, which regulates interstate rail transportation, approved the railway’s construction in 2021. But Eagle County, Colo. and environmental nonprofit Center for Biological Diversity sued, arguing that the board did not fully analyze the railroad’s potential effects on communities on the Gulf Coast, where many oil refineries are located and Utah’s oil is likely to go for processing, among other things.

Last year, a lower court sided with the county and environmentalists , throwing out the approval.

The Seven County Infrastructure Coalition, the public partner for the railway representing seven resource-rich counties in eastern Utah, appealed the decision to the Supreme Court. It asked the court to take a closer look at what the National Environmental Policy Act, or NEPA, requires in environmental reviews. The Supreme Court agreed to hear the case in June .

Several of the justices questioned what environmental impacts federal agencies should have to consider.

Environmental reviews should not thwart projects, railway supporters say

Federal agencies should not have to consider environmental impacts that are “remote in time and space” and “within the jurisdiction of other agencies,” argued Paul Clement, a lawyer for the Seven County Infrastructure Coalition. His law firm, Clement & Murphy, also is representing Utah in its costly Supreme Court challenge of federal lands .

Justice Ketanji Brown Jackson, one of the court’s liberal justices, said she felt this argument is “unmoored from the purposes of NEPA” and that limiting the scope of environmental review to the railway’s 88 miles is too narrow.

Clement responded that federal agencies can look at broader effects, but that considering environmental impacts beyond the project itself — such as impacts on Gulf Coast communities — should not prevent projects like the Uinta Basin Railway from being built.

Instead, he argued that NEPA reviews should help an agency understand alternative ways to implement a project and what mitigation measures can make it more environmentally friendly.

The Surface Transportation Board is only charged with approving a railroad to carry cargo, and the fact that this railroad’s cargo — waxy crude oil — may have environmental effects on Gulf Coast communities should not impact whether or not the agency approves it, Clement said.

Rather, he argues, other federal agencies and the Gulf Coast’s local governments would be better suited to confront increased oil refinement. And as to how increased oil development motivated by the railway would affect the Uinta Basin, he said, Utah entities should make those decisions, not the Surface Transportation Board.

Agencies must consider ‘foreseeable’ environmental effects, opponents contend

William Jay, representing Eagle County and environmental groups opposing the railway, argued that NEPA requires federal agencies to consider “foreseeable” environmental impacts of projects — and that those considerations may lead to denying projects.

Jay argued that the Surface Transportation Board must consider the environmental effects of oil refinement because the purpose of the Uinta Basin Railway is to move crude oil from Utah to the Gulf Coast for refinement.

He explained that the Uinta Basin Railway is a rare case, since the railroad would transport a single commodity to a single location — oil to the Gulf Coast. Most federal projects are less specific.

Several justices were skeptical of Jay’s argument that oil refinement on the Gulf Coast should inform the Surface Transportation Board’s environmental review and final decision on whether or not to approve the railway.

Jackson pressed what she believed is the “hardest” question: If the railway’s adverse environmental impacts are caused by oil, and the Surface Transportation Board cannot discriminate against that cargo, “then how is it that these environmental impacts are useful to the board’s decision-making in the way that NEPA requires?”

Jay said that since the Surface Transportation Board was able to quantify the amount of oil that would need to be transported by the proposed railway in order to make the railway financially viable, the agency assumed the oil would be refined.

“Under those circumstances where the rationale for the project is to permit unlocking more waxy crude oil development and where the board’s consideration of the benefits of the project is tied to that oil development, Jay said, “it follows that the board would at least consider what the environmental effects of doing so would be.”

Wendy Park, a senior attorney for the Center for Biological Diversity, said “there was a lot of confusion during oral arguments about the rule the project’s backers want the court to apply” in a statement after the hearing.

“They’re asking the justices to limit environmental reviews to the effects that are within an agency’s regulatory authority and project footprint. This conflicts with NEPA’s plain text,” she added, “and would undo decades of precedent at the expense of our communities, public health and the environment.”

Should the Supreme Court side with the railway’s backers, the project would still require additional permitting and reviews before it can be built.

The Supreme Court may be poised to walk back an oft-cited 2017 decision from a lower bench that directed federal agencies to take a broader look at the climate effects of energy projects.

During oral arguments last week over the National Environmental Policy Act review of an oil rail line in northeastern Utah, at least two of the court’s conservative justices asked how they should address the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Sierra Club v. FERC, more commonly known as Sabal Trail.

The ruling is frequently cited in litigation calling for agencies taking a statutorily required “hard look” at environmental risks of projects to more thoroughly consider downstream climate effects. In Sabal Trail, the D.C. Circuit called for more NEPA review of how a gas pipeline network would affect emissions from a power plant slated to use fuel from the project.

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Backers of the 88-mile Uinta Basin Railway at issue in last week’s Supreme Court case had asked the justices to consider whether the D.C. Circuit had improperly relied on Sabal Trail to expand NEPA reviews for other projects, like the Utah rail line. They asked the justices to send a message to lower courts that their rulings requiring more environmental review have gone too far.

“There is a real question whether [the justices] will effectively reverse Sabal Trail,” said Michael Burger, executive director of Columbia University’s Sabin Center for Climate Change Law.

But how the Supreme Court addresses Sabal Trail will depend on how narrowly the eight justices hearing the NEPA case decide to tailor their ruling, said Ivan London, a senior attorney at the Mountain States Legal Foundation, which wrote a “friend of the court brief” in support of the rail project. (Justice Neil Gorsuch recused himself from participating in Tuesday’s argument.)

London added that a Supreme Court ruling that addresses Sabal Trail would not actually overturn the 2017 decision but could have the functional effect of doing so — and it would mean that courts would have to be very careful about using the case as precedent going forward.

“I would tend to think that any ruling will be a narrow one in order to get Justice [Elena] Kagan, Justice [Sonia] Sotomayor and Justice Ketanji Brown Jackson on board,” he said, referring to the court’s three liberal members.

The Supreme Court’s ruling in the NEPA case — Seven County Infrastructure Coalition v. Eagle County, Colorado — is expected by early summer.

Sabal Trail was referenced a few times during last Tuesday’s Supreme Court hearing, though the justices’ questions did not clearly reveal how they might address the case in their ruling.

Since Sabal Trail was decided, federal judges have misread the ruling to improperly call for lengthier and more detailed NEPA analyses, said Paul Clement, a partner at the law firm Clement & Murphy, during last Tuesday’s argument.

“I think what Sabal Trail has come to be known for is worse than the decision itself,” said Clement, who represented supporters of the Utah oil rail line.

In the 2017 case, the D.C. Circuit issued a 2-1 decision tossing out the Federal Energy Regulatory Commission’s approval for the Southeast Market pipelines project in Florida. The court required the independent agency to consider how the project would contribute to greenhouse gas emissions for the power plant using the pipeline network’s gas to produce electricity.

Following Sabal Trail, judges have found that as long as an agency mentions an environmental risk, that makes it a “foreseeable” risk, said Clement.

If “it’s foreseeable, then you have to study it to death,” said Clement. “That creates all the wrong incentives.”

In the case currently before the Supreme Court, the D.C. Circuit had ruled that the Surface Transportation Board should have more broadly considered environmental risks of the Uinta Basin Railway.

Clement proposed a narrower test that would limit a court from penalizing an agency for not considering environmental effects far removed in time and space from a project and that are the purview of another federal agency.

His proposal did not seem to win over a majority of the court’s justices, although they did question how burgeoning NEPA analyses square with Congress’ recent directives to set tighter page limits on reviews.

Burger of the Sabin Center said it would be odd for a reviewing agency to say it would not consider secondary effects of a project.

“That’s what NEPA has always done, but there is some logical common sense limit to that,” he said.

Potential outcomes

It’s unclear how the Supreme Court might rule on NEPA’s scope, since last week’s arguments revealed wide-ranging opinions about what the case was or should be about, said Jennifer Danis, federal energy policy director at New York University’s Institute for Policy Integrity.

“Generally speaking, that makes it hard to figure out what kind of opinion we will see, but it is a pretty good indication that this case was not a good vehicle for providing guidance to lower courts on how to grapple with NEPA claims,” she said in an email.

One way the court could cabin NEPA review is to distinguish how Congress defined the Surface Transportation Board’s authority from that of FERC in Sabal Trail.

The Surface Transportation Board approves railroads that serve as common carriers. In other words, the agency doesn’t have discretion to refuse to carry crude on the Uinta Basin Railway to a national rail network. FERC’s gas pipeline siting authority, meanwhile, is exclusively for moving gas, leading the commission to consider downstream air pollution when it approves projects, Danis said.

“We could see an opinion leaning on the common carrier distinction,” she said.

Christi Tezak, senior director of ClearView Energy Partners, said in a note to clients following last week’s Supreme Court argument that the justices may not explicitly overrule Sabal Trail.

Offering more guidance, as project backers requested, or deferring to agency judgment on NEPA scope, as the federal government asked, “may make this an easier decision for the Court to both draft and agree on given the variety of organic statutes authorizing agency activities across the federal government,” Tezak wrote.

During last week’s arguments, Deputy Solicitor General Edwin Kneedler said it was a “close question” when asked by Justice Brett Kavanaugh what the court should say about Sabal Trail in its upcoming NEPA ruling.

Kneedler said there is a difference between the rail case and Sabal Trail because the Surface Transportation Board does not have control over where trains go.

“If you have a power plant at the end of a pipeline, it would be hard to say that’s not an indirect effect, at least, of the pipeline,” he said.

In this case, crude oil being carried out of Utah’s Uinta Basin could go to five different refineries, Kneedler said.

Later, Justice Amy Coney Barrett asked if Kneedler agreed that even if the Sabal Trail ruling were correct, whether courts’ interpretation of the decision is “too aggressive.”

Kneedler replied: “That’s what I was trying to convey.”

This story also appears in Climatewire.