The U.S. Supreme Court’s recent ruling in Seven County Infrastructure Coalition v. Eagle County, Colorado, narrows the scope of judicial review under the National Environmental Policy Act (NEPA) by affirming that courts must afford federal agencies “substantial deference” when evaluating the environmental effects of a proposed project.
The case involved an 88-mile rail line proposed in northeastern Utah, intended to transport crude oil from the Uinta Basin to refineries across the country. The Surface Transportation Board approved the project in 2021 after preparing a 3,600-page environmental impact statement. However, a federal appeals court later vacated the approval, arguing that the environmental review failed to adequately assess potential indirect impacts, such as increased oil refining and emissions in distant states. The Supreme Court overturned that decision, marking a shift in how NEPA is interpreted, potentially reducing the barriers for similar infrastructure projects where downstream effects are uncertain, geographically remote, or outside the control of the lead agency.
How Will the Decision Impact NEPA? Changes to NEPA in US Courts
Originally enacted in 1970, NEPA is intended as a public disclosure process requiring federal agencies to evaluate and share the potential environmental impacts of major actions before making decisions. In its opinion, the Supreme Court emphasized that NEPA does not require federal agencies to reject a project solely because it may cause environmental harm. Agencies are instead permitted to consider potential environmental impacts alongside anticipated project benefits and may approve a project if they determine it serves the public interest or results in a net benefit. This reinforces that NEPA is a procedural statute focused on informed decision-making, not mandating particular outcomes, and gives agencies discretion in how they analyze and justify their decisions, provided they follow required procedures.
The ruling also clarifies the scope of what environmental effects must be considered under NEPA:
Actions outside of an agency’s jurisdiction, such as indirect effects like downstream emissions from oil refining, or direct but geographically distant impacts like increased freight traffic on national rail lines, may be excluded from environmental analysis under the Supreme Court’s clarified interpretation.
Impacts that are distant in time or space, including those resulting from later development made possible by the project (e.g., future oil drilling facilitated by a rail line), may be excluded from analysis.
Impacts to Federally Linked Projects
Court challenges over how NEPA is applied are not new, but they’ve grown more frequent and contentious in recent years, particularly as major revisions to NEPA’s implementing regulations are actively under consideration. Executive Order 14154 (“Unleashing American Energy”) further shifted the landscape by revoking CEQ’s binding rulemaking authority and directing agencies to streamline environmental reviews. Against this backdrop, the Supreme Court’s decision may offer a clearer and narrower path forward for projects requiring federal approval.
With courts deferring more to agency expertise and limiting review of secondary impacts, some NEPA reviews may now face fewer delays or legal challenges. That said, NEPA still applies. Agencies must still conduct environmental analysis and disclose impacts. However, the threshold for what needs to be considered and what can be challenged in court has been clarified.
For clients planning or managing federally linked infrastructure, energy, or land development projects, environmental implications are still meaningful. While this ruling may limit legal challenges and reduce the scope of the environmental review, it doesn’t eliminate the need for thoughtful planning. Agency coordination remains critical, especially as agencies now hold more discretion in weighing project impacts. Public scrutiny and reputational risk still influence project outcomes, and NEPA timelines, although potentially shortened, benefit from early engagement and a clearly defined environmental scope..
If you’re unsure how this decision may impact your project or want to explore opportunities to streamline your review, Trihydro’s NEPA specialists can help.
