Key Takeaways
The Supreme Court ruled in favor of the Uinta Basin Railway in a unanimous 8-0 ruling.
The case involves an 88-mile railway that accesses oil production in the Uinta Basin in Utah, allowing for the expansion of domestic oil production as well as access to essential minerals in the region.
Green advocates sued the Surface Transportation Board because it approved the project without considering alleged but inestimable impacts far from the project.
The Supreme Court, as with prior rulings on the subject, held that agencies need to analyze environmental impact with “a reasonably close causal relationship” over which they have “statutory authority” and which they can prevent.
The National Environmental Policy Act (NEPA) has become a tool of delay by those opposing projects, particularly fossil fuel projects, in the United States.
The Supreme Court decision is expected to benefit investment in energy and infrastructure projects in the United States.
The U.S. Supreme Court narrowed the scope of environmental reviews for major federal projects in a case involving the Uinta rail project. In a 8-0 ruling, the Justices found that a lower court should more narrowly interpret National Environmental Policy Act (NEPA) analyses to give federal agencies more discretion in choosing the scope of effects they focus on. The eight justices agreed that NEPA should not be a substantive roadblock, which it has been, particularly under the Biden administration. According to Justice Brett Kavanaugh, writing the opinion for the court, joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, and Amy Coney Barrett, “The goal of the law is to inform agency decisionmaking, not to paralyze it.” (Justice Neil Gorsuch recused himself from the case.)
Specifically, the Supreme Court justices found that the U.S. Court of Appeals for the District of Columbia Circuit had exceeded its authority when it required a more comprehensive NEPA analysis for the 88-mile Uinta Basin Railway. The rail project would transport oil out of the Uinta Basin and connect it to the national railway network, where it would be shipped to Gulf Coast refineries, thereby providing access to larger markets. The railway could potentially quadruple the Uinta Basin’s oil production.
In 2023, the D.C. Circuit of Appeals ruled that the Surface Transportation Board had to consider how construction of the rail line could lead to more environmental harm from increased oil drilling and refining, as the train route would parallel the Colorado River for about 100 miles through the Western Slope. At issue is whether and when upstream and downstream environmental impacts should be considered in federal environmental reviews.
The project’s opponents were worried that an oil spill in the Colorado River watershed would have major consequences to the river. In contrast, the project’s proponents saw the project bringing an economic boom to the region by allowing companies to ship more oil and receive higher prices at Gulf Coast refineries.
The Supreme Court reversed the D.C. Appeals Court decision, restoring a critical permit from regulators. The decision means that agencies can approve projects like pipelines, railways, and dams and not be mandated to consider distant environmental effects of the projects, such as increased greenhouse gas emissions, that had stopped or delayed fossil fuel projects from moving forward, particularly during the Biden administration. Despite the Supreme Court ruling, the Uinta Basin Railway project could still face additional legal and regulatory hurdles within Colorado.
Background
In 2021, the federal Surface Transportation Board (STB) issued a 3,600-page environmental impact statement to comply with NEPA and approved the rail line. NEPA mandates that federal agencies assess the environmental effects of projects within their authority. Any major initiative that is managed, regulated, or authorized by the federal government must undergo a NEPA evaluation, a process that can span years and frequently exposes projects to legal challenges.
The STB analyzed the railway’s potential effects on local water resources, air quality, protected species, recreation, local economies, the Ute Indian tribe, and other factors. Environmental groups, however, sued the agency, saying that it failed to examine sufficiently how the railway might affect the risk of accidents on connecting lines hundreds of miles away and assess emissions in “environmental justice communities” on the Gulf Coast from increased oil shipments, among other supposed shortcomings.
According to the Wall Street Journal Editorial board, “A D.C. Circuit Court of Appeals panel sided with the plaintiffs and told the STB it must consider the line’s upstream and downstream effects even if they were hard to predict and beyond the control of the agency and developers. This includes the effects of oil shipments on Gulf Coast refiners and their contributions to climate change.” The appeals court ruling found that the federal STB violated the Endangered Species Act and the Interstate Commerce Commission Termination Act when it permitted the project.
In making their judgments, the lower court judges — those on the D.C. and Ninth Circuits — ignored the Supreme Court’s past rulings and imposed arbitrary permitting requirements with no limiting principle. In other related cases, the Supreme Court has held that agencies need not consider indirect and unpredictable impacts, most recently in a 2004 case, Department of Transportation v. Public Citizen. In that case, the Supreme Court held that agencies need only analyze environmental impacts with “a reasonably close causal relationship,” over which they have “statutory authority,” and which they can prevent. None of those considerations apply in this case.
It takes an average of 4.2 years to litigate a NEPA challenge, which adds to the four or more years to obtain a federal permit. These delays are what frustrate investment in new projects, slowing job creation and economic expansion in the United States.
Conclusion
The Supreme Court, in keeping with past rulings, decided in favor of the Uinta Basin railway project in opposition to lower court rulings. The Supreme Court held that agencies need only analyze environmental impact with “a reasonably close causal relationship” over which they have “statutory authority” and which they can prevent. The ruling was a unanimous 8-0 decision as Justice Neil Gorsuch recused himself from the case. It is a big win for energy projects, particularly fossil fuel projects, which are being promoted by the Trump administration to avoid a supply shortage and potentially brownouts and blackouts in the generating sector.
