On May 29, 2025, a unanimous Supreme Court (voting 8-0, with Justice Gorsuch recused) held that federal agencies need not consider the environmental effects of “upstream” and “downstream” projects that are separate in time or place from the project under review. See Seven County Infrastructure Coalition v. Eagle County, Colorado.
By limiting the required scope of reviews under the National Environmental Policy Act (“NEPA”), Seven County Infrastructure Coalition could shorten—and weaken—NEPA’s review process. The decision also raises important questions regarding the degree of deference afforded to agencies on mixed issues of fact and law following Loper Bright Enterprises v. Raimondo, as well as the extent to which agencies may—if they so choose—consider the environmental impacts of upstream and downstream projects.
Background
In 2020, the Seven County Infrastructure Coalition (“Coalition”) applied to the U.S. Surface Transportation Board (“Board”) for approval of an 88-mile railroad line for the transportation of crude oil from Utah’s Uinta Basin to refineries along the Gulf Coast. As part of its review, the Board prepared an Environmental Impact Statement (“EIS”) under NEPA discussing the project’s significant environmental effects and feasible alternatives. The final EIS analyzed impacts of the railway’s construction and operation. The EIS also noted, but did not fully analyze, potential impacts from increased oil drilling in the Uinta Basin and refining of crude oil carried on the railroad. The Board ultimately approved the project, concluding that its transportation and economic benefits outweighed the environmental impacts identified in the EIS.
A Colorado county and several environmental organizations filed a petition in the U.S. Court of Appeals for the D.C. Circuit challenging the Board’s approval. According to the plaintiffs, the Board failed to adequately analyze reasonably foreseeable impacts from upstream oil drilling and downstream oil refining. The D.C. Circuit agreed and vacated the EIS and the Board’s approval of the project.
Analysis
The Supreme Court reversed the D.C. Circuit, holding that “when the effects of an agency action arise from a separate project—for example, a possible future project or one that is geographically distinct from the project at hand—NEPA does not require the agency to evaluate the effects of that separate project.” Thus, the Board was not required to consider the effects of upstream oil drilling or downstream oil refining in its EIS.
Agency Deference After Loper Bright
Justice Kavanaugh, writing for the Court, noted that, per the Court’s decision in Loper Bright, agencies are owed no deference on issues of statutory interpretation. Yet here, the Court instructed, the court of appeals should have “afford[ed] substantial deference” to the Board, because “when an agency exercises discretion granted by a statute, judicial review is typically conducted under the Administrative Procedure Act’s deferential arbitrary-and-capricious standard.” And where this standard applies, courts “should not micromanage” agencies so long as their choices “fall within a broad zone of reasonableness.”
According to the Court, NEPA’s “purely procedural” command that agencies provide a “detailed” statement of reasonably foreseeable environmental effects implicates not just a question of law (the meaning of “detailed”) but also the primarily factual question of what details to include in an EIS. Thus, although the Court’s decision never expressly uses the term “mixed question of fact and law,” it suggests that even after Loper Bright courts may sometimes defer to agencies on such mixed questions, which often implicate agencies’ technical expertise.
The Project At Hand vs. Separate Projects
The Court emphasized that the NEPA’s “textually mandated focus” is the “‘proposed action’—that is, the project at hand—not other future or geographically separate projects that may be built (or expanded) as a result of or in the wake of the immediate project under consideration.” According to the Court, the fact of the separate project “breaks the chain of proximate causation,” such that the agency need not consider the environmental impacts of the second project, even if those impacts are foreseeable.
Relying on its decision in Department of Transportation v. Public Citizen, the Court further reasoned that NEPA does not require agencies to analyze the effects of projects over which they do not exercise regulatory authority. “ Other agencies possess authority to regulate those separate projects and their environmental effects,” the Court stated. For this reason too, the Court concluded, there is no “reasonably close causal relationship” between the railroad project at issue and the environmental effects of the separate oil drilling and oil refining projects.
Nevertheless, the Court recognized that “indirect effects can sometimes fall within NEPA.” Although agencies need not consider the effects of separate projects, “the environmental effects of the project at issue may fall within NEPA even if those effects might extend outside the geographical territory of the project or might materialize later in time.” (Emphases in original.)
Open Questions
Although the Court held that NEPA does not require agencies to consider the effects of upstream and downstream projects in environmental reviews, its decision appears to leave agencies the option to do so if they choose. Indeed, the Court’s ode to agency discretion seems to confirm the point—as does the Court’s statement that “[t]he Board should not necessarily earn bonus points for studying more than NEPA demanded” but “should definitely not receive a failing grade just because its 3,600-page EIS was less thorough in analyzing the effects from other projects than the Court of Appeals might have preferred.”
Likewise unclear is the scope of agency deference here and how such deference will be applied in subsequent cases. Indeed, in a footnote about instances in which “an agency denies approval of a project,” the Court is notably silent on the issue of deference, instead suggesting several grounds on which an applicant might challenge such a denial:
When, unlike this case, an agency denies approval of a project, the denied applicant may ordinarily challenge the denial under the APA or the relevant agency’s governing statute. The denied applicant may argue, among other things, that the agency acted unreasonably in denying approval by weighing environmental consequences too heavily in light of the agency’s governing statute and other relevant factors, or perhaps that the agency erred because the governing statute did not allow the agency to weigh environmental consequences at all. NEPA does not alter those judicial inquiries.
Perhaps, then, the extent to which this Court will defer to an agency’s NEPA analysis will depend on whether it views the agency’s decision to—in its words—use NEPA as a “blunt and haphazard tool … to try to stop or at least slow down new infrastructure and construction projects.”
