Supreme Court derails environmental restrictions for Utah oil project

WASHINGTON (CN) — The Supreme Court put a Utah oil railway back on track Thursday, rejecting an expansive environmental review stymieing the project.

Industry projects like the Uinta Basin Railway must be studied and approved under the National Environmental Policy Act. The 88-mile railway was approved by the Surface Transportation Board in 2021, but environmental advocates and Eagle County, Colorado, said that the board’s scrutiny was insufficient.

The Supreme Court disagreed, finding that making fact-dependent, context-specific and policy-laden choices was within the board’s authority.

“Courts should afford substantial deference and should not micromanage those agency choices so long as they fall within a broad zone of reasonableness,” Justice Brett Kavanaugh, a Donald Trump appointee, wrote for the court.

The justices unanimously rejected the D.C. Circuit’s ruling but split along ideological lines in opinions as to why.

The Uinta Basin Railway plans to transport waxy crude oil sources from Utah’s northeastern mountains to the existing freight rail network. Seven County Infrastructure Coalition, the political subdivision behind the project, estimated that with as many as 10 daily trains, the rail line could transport up to 350,000 barrels of oil out of the basin each day.

In its 2021 assessment, the board said construction on the line could disturb local waters and wetlands and lead to increased noise for local wildlife.

Eagle County — which is along the railway’s planned route — argued that the board needed to consider how the Uinta Basin Railway would impact oil production by Gulf refineries, leading to increased pollution.

A D.C. Circuit panel sided with Eagle County and the environmental advocates, ordering a more comprehensive environmental review. During oral arguments at the Supreme Court in December, the justices looked unlikely to agree.

Kavanaugh knocked the D.C. Circuit for not affording the Surface Transportation Board appropriate deference, and broadly interpreting the National Environmental Policy Act to include an expansive review to address the environmental effects of upstream oil drilling and downstream oil refining.

The justices called on courts to do away with aggressive policing of compliance with the act, known as NEPA, which Kavanaugh said has led to overly intrusive reviews.

“The upshot: NEPA has transformed from a modest procedural requirement into a blunt and haphazard tool employed by project opponents (who may not always be entirely motivated by concern for the environment) to try to stop or at least slow down new infrastructure and construction projects,” Kavanaugh wrote.

Kavanaugh said courts only needed to review whether the agency acted reasonably, not whether it agreed with the decision.

“NEPA’s procedural mandate helps ‘to ensure a fully informed and well-considered decision, not necessarily a decision the judges of the Court of Appeals or this court would have reached had they been members of the decisionmaking unit of the agency,’’” Kavanaugh wrote, citing Vermont Yankee Nuclear Power Corp. v. NRDC .

The Supreme Court emphasized that the environmental effects included in NEPA might extend outside the geographical territory of a project. Kavanaugh said this includes runoff into a river that disturbs fish downstream.

However, whether a housing development might someday be built near a highway project would fall outside of NEPA considerations. Kavanaugh distinguished these indirect effects based on whether they fall into the project under review or a separate project.

“The effects from a separate project may be factually foreseeable, but that does not mean that those effects are relevant to the agency’s decisionmaking process or that it is reasonable to hold the agency responsible for those effects,” Kavanaugh wrote.

Justices Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson concurred with the court’s judgment, but said it was unnecessarily grounded in policy instead of statutory analysis.

In an opinion penned by Sotomayor, a Barack Obama appointee, the liberal justices said the act was limited by the environmental impacts that it is responsible for.

“Even a foreseeable environmental effect is outside of NEPA’s scope if the agency could not lawfully decide to modify or reject the proposed action on account of it,” Sotomayor wrote. “NEPA thus did not require the board to consider the effects of oil drilling and refining.”

The Supreme Court’s ruling curtailed judicial authority to intervene in disagreements over the environmental effects of building projects, but it’s unclear as of now how the decision will play out on the ground.

Cale Jaffe, director of the University of Virginia School of Law’s Environmental Law and Community Engagement Clinic, said that before NEPA, environmental review suffered because agencies were operating in silos.

“It’s been a bit unfortunate that in the dialogue on NEPA, we have confused the quality of environmental review and the quantity of environmental review,” Jaffe said. “There’s broad agreement that review for review’s sake … isn’t necessarily helpful, but you don’t want to throw out the baby with the bathwater.”

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