/>iOn May 29, 2025, the Supreme Court held that the National Environmental Policy Act (NEPA) — which requires federal agencies to analyze the environmental impacts of projects that they carry out, fund, or approve — does not require agencies to consider the effects of “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.” The Court’s decision narrows the scope of effects that agencies must consider under NEPA, provides clear direction to agencies and lower courts, and will likely benefit developers of infrastructure and other projects that require federal agency approvals or receive federal funding.
Background
In this case, Seven County Infrastructure Coalition v. Eagle County, Colorado, Eagle County and several environmental groups challenged the adequacy of the environmental impact statement (EIS) that the Surface Transportation Board (STB) prepared for its approval of the construction of a new 88-mile railroad line that would connect Utah’s oil-rich Uinta Basin to the national railway network. The petitioners claimed that the EIS should have analyzed in greater detail the project’s so-called “upstream” impacts of increased oil production in the Uinta Basin and the so-called “downstream” impacts of increased oil refining in the Gulf Coast. The petitioners argued that these upstream and downstream environmental impacts would foreseeably result from easier transportation of crude oil along the new railroad line. The D.C. Circuit Court of Appeals agreed with the petitioners, holding that the STB “impermissibly limited its analysis of upstream and downstream projects” and that the environmental effects from increased oil production and refining were “reasonably foreseeable impacts” of the new railroad line that the EIS should have analyzed in greater detail.
The Supreme Court’s Decision
The Supreme Court, in an opinion authored by Justice Kavanaugh, reversed the D.C. Circuit. The Court’s decision rested on two main pillars: (1) federal agencies are owed “substantial judicial deference” in defining the scope and level of detail of an EIS, and (2) NEPA does not require an agency to consider the effects of other projects that are separate in time or place.
The Court began its opinion by emphasizing that courts reviewing an EIS for compliance with NEPA must give “substantial deference” to the agency. The Court reiterated some well-known principles from its canon of NEPA and Administrative Procedure Act cases over the past five decades, including that NEPA is a “purely procedural statute” that places “no substantive constraints” on an agency’s ultimate decision to approve or deny a project, and that a court’s only role is to determine “whether the agency action was reasonable and reasonably explained.” Drawing on this precedent, the Court explained that courts should uphold agencies’ decisions regarding the scope and content of an EIS — such as what the project’s likely impacts are, the extent to which direct and indirect impacts are discussed, what alternatives are considered, and whether effects from other projects are analyzed — “so long as they fall within a broad zone of reasonableness.” In this regard, the Court lamented that some lower courts have “not applied NEPA with the level of deference demanded by the statutory text and this Court’s cases,” thus transforming NEPA “from a modest procedural requirement into a blunt and haphazard tool employed by project opponents.” The Court noted that judicial review under NEPA had strayed so far out of line with “statutory text and common sense” that a “course correction of sorts is appropriate.”
In the second part of the opinion, the Court held 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.” The Court clarified that NEPA “can sometimes” require analysis of the proposed project’s effects that are later in time or geographically removed (so-called indirect effects), but not other projects’ effects. The Court repeated a refrain from the first part of its opinion, stating that an agency must have the ability to “draw what it reasonably concludes is a manageable line” between the effects of the project at hand and some future project separate in time or place. This principle is necessary to prevent a “relatively small infrastructure project” from turning into a “scapegoat for everything that ensues from upstream oil drilling to downstream refinery emissions.” The Court found that the line drawn by the STB was reasonable and that the D.C. Circuit erred in requiring analysis of the effects of upstream and downstream projects of the railroad line.
Implications
The Court’s decision is a win for project developers and federal agencies because it provides a relatively clear rule limiting the scope of indirect effects that agencies must consider under NEPA to only those effects of the project under consideration.
In this respect, the Court’s decision represents a significant departure from prior NEPA practice. Agencies and courts have long understood NEPA to require some consideration of indirect or secondary effects that are reasonably foreseeable. This principle is rooted in the Council on Environmental Quality’s (CEQ) guidance documents issued in the early years after NEPA was enacted in 1970 and was carried forward in CEQ’s subsequent (and recently rescinded) regulations. (For example, for all but two years since 1978, CEQ’s regulations required analysis of “growth inducing effects and other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems.” (40 C.F.R. § 1508.8(b) (1978); 40 C.F.R. § 1508.1(g)(2) (2022); 40 C.F.R. § 1508.1(i)(2) (2024).)) Courts and agencies have struggled to consistently demarcate the contours of indirect effects that must be considered (i.e., what effects are reasonably foreseeable). Litigation on this topic has picked up in the past decade around whether agencies must consider the upstream and downstream effects (including climate change impacts) of projects involving development or transportation of fossil fuels.
The Court’s ruling in Seven County largely settles the debate regarding upstream and downstream effects by creating a relatively clear rule for agencies and courts to follow: The effects of other projects that may result from the project under consideration are not reasonably foreseeable and, therefore, need not be analyzed under NEPA. Still, disputes may continue to arise over which indirect effects of a proposed action are reasonably foreseeable and still must be considered, particularly in light of the Court’s ambiguous statement that NEPA “can sometimes” require analysis of a project’s indirect effects. In addition, the “broad latitude” that agencies have in carrying out NEPA can swing both ways, depending on the administration: The Seven County decision appears to leave the door open to allowing agencies to consider the effects of other projects removed in time and place if they so choose (even though it is not required), so long as such choices around which effects to analyze and whether to analyze the effects of other projects are “reasonable and reasonably explained.”
The Seven County decision should put federal agencies and project developers in a better position to prevail in NEPA lawsuits. The decision sends a strong message to federal courts that federal agencies have considerable discretion in conducting environmental reviews under NEPA, particularly regarding decisions on where to “draw the line” for the scope and contents of the analysis. And although dicta (i.e., not part of the Court’s holding), a passage in the Court’s opinion suggests that courts should exercise restraint in setting aside an agency’s approval of a project even when they find the agency violated NEPA: “The ultimate question is not whether an EIS in and of itself is inadequate, but whether the agency’s final decision was reasonable and reasonably explained. Review of an EIS is only one component of that analysis. Even if an EIS falls short in some respects, that deficiency may not necessarily require a court to vacate the agency’s ultimate approval of a project, at least absent reason to believe that the agency might disapprove the project if it added more to the EIS.”
While the first part of the Seven County opinion (regarding the substantial deference courts owe to agencies’ compliance with NEPA) did not necessarily tread new legal ground, its discussion of how NEPA litigation has led to fewer and more expensive infrastructure projects is likely to resonate with many project developers and may influence future legislative and regulatory attempts at NEPA and permitting reform. The Court observed that “overly intrusive (and unpredictable)” lower court rulings “have slowed down or blocked many projects and, in turn, caused litigation-averse agencies to take ever more time and to prepare ever longer EISs for future projects.” As a result, “[f]ewer projects make it to the finish line. Indeed, fewer projects make it to the starting line. Those that survive often end up costing much more than is anticipated or necessary, both for the agency preparing the EIS and for the builder of the project. And that in turn means fewer and more expensive railroads, airports, wind turbines, transmission lines, dams, housing developments, highways, bridges, subways, stadiums, arenas, data centers, and the like. And that also means fewer jobs, as new projects become difficult to finance and build in a timely fashion. A 1970 legislative acorn has grown over the years into a judicial oak that has hindered infrastructure development under the guise of just a little more process.”
The Court’s decision comes amid what is arguably the biggest upheaval of NEPA practice in the law’s 55-year history. Last month, CEQ rescinded its implementing regulations, which had provided consistent and judicially enforceable rules applicable to all federal agencies in one form or another since 1978. As soon as next month, individual agencies are expected to publish new rules for implementing NEPA, which may curtail the scope of analysis and public participation in the NEPA process. And this all comes on the heels of the 2023 Fiscal Responsibility Act, which included the most significant statutory amendments to NEPA since it was enacted in 1970.
