The Supreme Court may be poised to walk back an oft-cited 2017 decision from a lower bench that directed federal agencies to take a broader look at the climate effects of energy projects.
During oral arguments last week over the National Environmental Policy Act review of an oil rail line in northeastern Utah, at least two of the court’s conservative justices asked how they should address the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Sierra Club v. FERC, more commonly known as Sabal Trail.
The ruling is frequently cited in litigation calling for agencies taking a statutorily required “hard look” at environmental risks of projects to more thoroughly consider downstream climate effects. In Sabal Trail, the D.C. Circuit called for more NEPA review of how a gas pipeline network would affect emissions from a power plant slated to use fuel from the project.
Backers of the 88-mile Uinta Basin Railway at issue in last week’s Supreme Court case had asked the justices to consider whether the D.C. Circuit had improperly relied on Sabal Trail to expand NEPA reviews for other projects, like the Utah rail line. They asked the justices to send a message to lower courts that their rulings requiring more environmental review have gone too far.
“There is a real question whether [the justices] will effectively reverse Sabal Trail,” said Michael Burger, executive director of Columbia University’s Sabin Center for Climate Change Law.
But how the Supreme Court addresses Sabal Trail will depend on how narrowly the eight justices hearing the NEPA case decide to tailor their ruling, said Ivan London, a senior attorney at the Mountain States Legal Foundation, which wrote a “friend of the court brief” in support of the rail project. (Justice Neil Gorsuch recused himself from participating in Tuesday’s argument.)
London added that a Supreme Court ruling that addresses Sabal Trail would not actually overturn the 2017 decision but could have the functional effect of doing so — and it would mean that courts would have to be very careful about using the case as precedent going forward.
“I would tend to think that any ruling will be a narrow one in order to get Justice [Elena] Kagan, Justice [Sonia] Sotomayor and Justice Ketanji Brown Jackson on board,” he said, referring to the court’s three liberal members.
The Supreme Court’s ruling in the NEPA case — Seven County Infrastructure Coalition v. Eagle County, Colorado — is expected by early summer.
Sabal Trail was referenced a few times during last Tuesday’s Supreme Court hearing, though the justices’ questions did not clearly reveal how they might address the case in their ruling.
Since Sabal Trail was decided, federal judges have misread the ruling to improperly call for lengthier and more detailed NEPA analyses, said Paul Clement, a partner at the law firm Clement & Murphy, during last Tuesday’s argument.
“I think what Sabal Trail has come to be known for is worse than the decision itself,” said Clement, who represented supporters of the Utah oil rail line.
In the 2017 case, the D.C. Circuit issued a 2-1 decision tossing out the Federal Energy Regulatory Commission’s approval for the Southeast Market pipelines project in Florida. The court required the independent agency to consider how the project would contribute to greenhouse gas emissions for the power plant using the pipeline network’s gas to produce electricity.
Following Sabal Trail, judges have found that as long as an agency mentions an environmental risk, that makes it a “foreseeable” risk, said Clement.
If “it’s foreseeable, then you have to study it to death,” said Clement. “That creates all the wrong incentives.”
In the case currently before the Supreme Court, the D.C. Circuit had ruled that the Surface Transportation Board should have more broadly considered environmental risks of the Uinta Basin Railway.
Clement proposed a narrower test that would limit a court from penalizing an agency for not considering environmental effects far removed in time and space from a project and that are the purview of another federal agency.
His proposal did not seem to win over a majority of the court’s justices, although they did question how burgeoning NEPA analyses square with Congress’ recent directives to set tighter page limits on reviews.
Burger of the Sabin Center said it would be odd for a reviewing agency to say it would not consider secondary effects of a project.
“That’s what NEPA has always done, but there is some logical common sense limit to that,” he said.
Potential outcomes
It’s unclear how the Supreme Court might rule on NEPA’s scope, since last week’s arguments revealed wide-ranging opinions about what the case was or should be about, said Jennifer Danis, federal energy policy director at New York University’s Institute for Policy Integrity.
“Generally speaking, that makes it hard to figure out what kind of opinion we will see, but it is a pretty good indication that this case was not a good vehicle for providing guidance to lower courts on how to grapple with NEPA claims,” she said in an email.
One way the court could cabin NEPA review is to distinguish how Congress defined the Surface Transportation Board’s authority from that of FERC in Sabal Trail.
The Surface Transportation Board approves railroads that serve as common carriers. In other words, the agency doesn’t have discretion to refuse to carry crude on the Uinta Basin Railway to a national rail network. FERC’s gas pipeline siting authority, meanwhile, is exclusively for moving gas, leading the commission to consider downstream air pollution when it approves projects, Danis said.
“We could see an opinion leaning on the common carrier distinction,” she said.
Christi Tezak, senior director of ClearView Energy Partners, said in a note to clients following last week’s Supreme Court argument that the justices may not explicitly overrule Sabal Trail.
Offering more guidance, as project backers requested, or deferring to agency judgment on NEPA scope, as the federal government asked, “may make this an easier decision for the Court to both draft and agree on given the variety of organic statutes authorizing agency activities across the federal government,” Tezak wrote.
During last week’s arguments, Deputy Solicitor General Edwin Kneedler said it was a “close question” when asked by Justice Brett Kavanaugh what the court should say about Sabal Trail in its upcoming NEPA ruling.
Kneedler said there is a difference between the rail case and Sabal Trail because the Surface Transportation Board does not have control over where trains go.
“If you have a power plant at the end of a pipeline, it would be hard to say that’s not an indirect effect, at least, of the pipeline,” he said.
In this case, crude oil being carried out of Utah’s Uinta Basin could go to five different refineries, Kneedler said.
Later, Justice Amy Coney Barrett asked if Kneedler agreed that even if the Sabal Trail ruling were correct, whether courts’ interpretation of the decision is “too aggressive.”
Kneedler replied: “That’s what I was trying to convey.”
This story also appears in Climatewire.
