How Broad Is Too Broad? Supreme Court Considers Scope of NEPA

The case arises at a critical moment in environmental and administrative law. In its last term, the Court overruled the Chevron Doctrine, and the D.C. Circuit recently invalidated the White House Council on Environmental Quality’s (CEQ) NEPA regulations in Marin Audubon Society v. Federal Aviation Administration.

Background
Under NEPA, enacted in 1969, federal agencies have an obligation to consider the environmental effects of proposed “major Federal actions” before approving or proceeding with the action. For decades, courts have grappled with the statute’s scope—namely, which impacts the agencies must consider. The U.S. Supreme Court’s prior decisions established foundational principles: agencies must consider effects with a “reasonably close causal relationship” to the proposed action, but they are not obligated to analyze effects arising from actions beyond their regulatory authority. Metropolitan Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 774 (1983); Department of Transportation v. Public Citizen, 541 U.S. 752 (2004).

Attempting to clarify NEPA requirements, Congress amended NEPA in 2023, reinforcing that agencies must consider only those effects deemed “reasonably foreseeable.”

The Uinta Basin Railway Project
At the heart of the dispute is the Uinta Basin Railway Project, an 88-mile rail line designed to transport waxy crude oil from Utah’s remote Uinta Basin to the main Union Pacific rail line, which is located along the Colorado River and would ultimately transport the crude to Gulf Coast refineries. The Board’s EIS analyzed a range of local effects, including impacts on water resources, air quality, land use and federally protected species.

Eagle County, Colorado and five environmental groups challenged the adequacy of the EIS, alleging that the Board failed to evaluate broader downstream and upstream effects, including:

• Downline impacts of additional crude oil refining on the Gulf Coast communities, such as increased pollution in environmental justice communities;
• Downline effects of potential oil spills along the Colorado River;
• Upline impacts from additional drilling in the Uinta Basin, such as an increase in regional train traffic; and
• Increase in greenhouse gas emissions from the refining and combustion of the transported crude.

The D.C. Circuit sided with project opponents, holding that the Board’s failure to analyze these effects rendered its approval arbitrary and capricious under NEPA. As a result, the project remains on hold pending U.S. Supreme Court review.

The Issue Before the Court
The U.S. Supreme Court must now decide whether NEPA requires federal agencies to consider all reasonably foreseeable environmental impacts, including those beyond their regulatory authority and the locale of the federal action at issue. In other words, is an EIS limited to the proximate effects of the action over which the agency has authority? The Seven County petitioners assert that courts have gone too far in requiring consideration of increasingly remote upstream and downstream effects. This is, in part, driven by the D.C. Circuit’s 2017 decision in Sierra Club v. FERC, commonly known as Sabal Trail, which is frequently cited in support of calls for agencies to more thoroughly consider downstream climate effects when taking its statutorily required “hard look” at environmental impacts.

Competing interpretations of Department of Transportation v. Public Citizen also featured prominently in the arguments. In 2004, the court unanimously held in Public Citizen that “where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant ‘cause’ of the effect.” The project’s opponents contend that Public Citizen allows agencies to exclude effects only when their consideration would “serve no purpose” under NEPA’s framework. The proponents argue that Public Citizen establishes limits on NEPA’s reach, relieving agencies from considering impacts that are remote in time or under another agency’s jurisdiction.

At oral argument, the Court wrestled with balancing NEPA’s goals with the practical constraints of environmental reviews, with several justices questioning whether the project’s proponents were seeking an overly narrow rule that would be impractical to implement. On the one hand, Justices Roberts, Sotomayor, Kagan and Jackson expressed hesitation at adopting the project proponents’ limited test for reasonable foreseeability. This test would first require evaluation of whether an impact is (1) too remote in time and effect and (2) outside the jurisdiction of the reviewing agency. If both were met, then the impact would not be required to be considered, and an incorrect analysis of those factors would constitute merely a harmless error in the NEPA review.

Potential Implications of the Decision
The oral arguments suggest the Court may be aligned to overturn the vacatur and uphold the EIS, though consensus on clarifying the scope of EIS considerations remains elusive. While some justices suggested advantages to a bright line test for the boundaries of NEPA obligations, the rigidity and practicality of implementing such a rule was equally troubling for others.

Instead of adopting the narrower rule sought by the petitioners, the Court may instead strike a middle ground, reaffirming NEPA’s “reasonably foreseeable” standard and Public Citizen’s clarification that agencies only must consider environmental effects with a reasonably close causal relationship to a project or decision under review while providing additional clarity on its practical application. Despite its earlier ruling this year in Loper Bright, the Court’s questioning did not suggest readiness to adjust the lower courts’ deference to an agency’s NEPA judgments. Such a decision could aim to balance NEPA’s goals with the need for efficient infrastructure development.

Irrespective of the outcome, which is expected next summer, the Court’s ruling in Seven County will likely have far-reaching implications for environmental review processes, infrastructure projects, energy development and critical mineral mining projects. If the D.C. Circuit’s decision is upheld, federal agencies may face more expansive obligations under NEPA, potentially prolonging project approvals and increasing litigation risks. Proponents argue that such a result would stifle development, particularly for projects critical to achieving domestic energy and mineral production goals.

Looking Ahead
This case comes amid significant upheavals in administrative and environmental law. In the wake of Chevron’s demise and the D.C. Circuit’s decision in Marin, the U.S. Supreme Court’s ruling will help define the boundaries of NEPA’s environmental review requirements. Pillsbury will continue to monitor developments in this case and report on the consequences of the Court’s decision on infrastructure, energy and mineral projects nationwide.