Fueling The Conversation, Week of June 16th, 2025
The National Environmental Policy Act (NEPA) has become infamous for its role as a blockade to development in the United States. Signed into law on January 1, 1970, at fewer than six pages, NEPA’s original intent was to inform the public on the environmental impact of large projects through the publication of environmental reviews, called environmental impact statements. Over time, however, what began as a procedural safeguard has morphed into a burdensome process that serves to stop projects through endless public commentary, hearings, bureaucratic delays, and legal challenges.
While there has been endless talk in Washington over the years about the need to reform NEPA, the Trump administration is taking decisive action. In response to the D.C. Circuit Court case Marin Audubon Society v. Federal Aviation Administration, which found that the Council on Environmental Quality (CEQ) lacks the statutory authority to issue binding rules on federal agencies, President Trump withdrew all CEQ NEPA guidance issued since 1977. These guidelines forced federal agencies to incorporate analyses — such as the consideration of climate impacts and environmental justice (added under the Biden administration) — into environmental reviews. These guidelines were not derived from the text of NEPA but had been added and modified over the decades to respond to judicial activism as well as the changing policy preferences of presidential administrations.
Congress has also recently made small efforts to address NEPA delays, passing a 2023 law limiting the page count and setting deadlines for environmental reviews. However, these were simply added on top of existing CEQ regulations and court precedents. While well intended, these changes fail to address the core issues with NEPA.
The main problem with NEPA is that, over time, lower courts have granted litigants nearly unlimited ability to argue that a federal agency failed to consider certain impacts in its review. A page limit like the one imposed by Congress actually makes a lawsuit more likely, as there’s less space to consider the potentially vast array of impacts, creating a tough dilemma for federal agencies looking to comply with the law and protect themselves from lawsuits. Fundamentally, without other reform, the main effect of a page limit would likely make the environmental review process longer, with agencies caught up in a lengthy legal back-and-forth as courts mandate new or revised reviews. As R Street’s Philip Rossetti explains, “litigation is the primary driver of NEPA delays.”
Eliminating the CEQ’s guidance is a step in the right direction, but there’s nothing stopping a future administration from reinstating these rules, and it does nothing to address the role of courts. The most needed reforms to NEPA must come either from Congress passing legislation that limits the risk of litigation or the Supreme Court recognizing that, in practice, NEPA has expanded far beyond its original statutory requirements.
Fortunately, the latter of these occurred in late May when the Supreme Court unanimously decided to overturn the D.C. Circuit Court of Appeals’s ruling in Seven County Infrastructure Coalition v. Eagle County, Colorado. The case involved the Surface Transportation Board (STB) permitting an 88-mile railway in northeastern Utah to connect the oil-rich Uinta basin to the national rail network.
Although the STB wrote a 3,600-page environmental impact statement that considered the project’s significant environmental effects, the D.C. Circuit ruled that the review neglected the effects of upstream oil drilling and downstream oil refining that could result from the railway being built because it merely “noted,” instead of analyzed, these events.
In the majority opinion, Supreme Court Justice Brett Kavanaugh addressed the main problems with this ruling while holding “that NEPA is a purely procedural statute.” The court determined that the D.C. Circuit failed to give the STB the deference it needs in order for NEPA to function properly. Since the potential environmental effects of any project are almost infinite, it is up to an agency to decide the scope it will examine. Otherwise, any interest group seeking to block or delay a project could claim that a review gave insufficient attention to a particular issue no matter how insignificant. According to the court, “Courts should afford substantial deference and should not micromanage those agency choices so long as they fall within a broad zone of reasonableness.”
The other problem with the D.C. Circuit’s ruling is that it failed to differentiate between the environmental effects resulting from the project under consideration and those from separate projects outside the STB’s jurisdiction. The STB has no authority over how much oil is drilled or to which refineries it is transported, making these questions irrelevant. As Justice Kavanaugh explained, “The effects from a separate project may be factually foreseeable, but that does not mean that those effects are relevant to the agency’s decision-making process or that it is reasonable to hold the agency responsible for those effects.”
Another interesting finding by the court comes from footnote three of the opinion, which states that “federal law now strictly prohibits an agency’s [environmental impact statement] from going on endlessly,” – a reference to the aforementioned page limits signed into law by President Biden. If, as this footnote indicates, the Supreme Court recognizes that statutory law supports the shortening of environmental reviews under NEPA, this is a positive sign that they’ll continue to rule against lawsuits that require reviews to be lengthier than an agency determines necessary.
NEPA was created as a tool to mitigate environmental impacts (not eliminate them) and to inform the public. Instead, it has been weaponized to delay or cancel projects by providing endless opportunities for litigation by opposition groups. While the Trump administration and the Supreme Court were correct to recognize that NEPA has done more than its statute permits, Congress should further limit NEPA’s harm by passing sensible limits on lawsuits regarding environmental reviews.
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Fueling the Conversation, a weekly column by IER President Tom Pyle, offers a principled take on energy events. Energy underpins all aspects of modern life, so policies that artificially limit production hurt everyday people paying to heat their homes and driving to work. “Green” groups push these policies for idealogical reasons, but this column uses economic logic and hard facts to advocate for energy freedom.
