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The Supreme Court’s Seven County Case: New Legal Principles Govern the National Environmental Policy Act

Gregor I. McGregor

Last May, the U.S. Supreme Court significantly affected how agencies comply with the National Environmental Policy Act (NEPA), and how courts review compliance, in its decision Seven County Infrastructure Coalition v. Eagle County et al, (2025).

The 5-3 majority (Gorsuch did not participate in the decision) held that courts must give

federal agencies “substantial judicial deference” when reviewing NEPA documents. Specifically, the court found that NEPA does not require agencies to consider the environmental effects of upstream or downstream projects that are “separate in time or place” from the proposed action subject to NEPA review.

Factual Background: The Seven County Infrastructure Coalition filed a petition to construct and operate an 80-mile railway in the Utah’s Unita Basin, to transport waxy crude oil from the Basin. The Surface Transportation Board (STB), the federal agency responsible for approving railroad projects in Colorado, prepared an Environmental Impact Statement (EIS) for the project but declined to include impacts beyond the project site in its report.

Namely, the Environmental Impact Statement did not consider the effects of increased crude oil refining, of potential oil spills, or effects on historic sites or existing infrastructure along the railway and Colorado River. The Surface Transportation Board authorized the project. A coalition of environmental groups and Eagle County, Colorado challenged this decision for failing to meet NEPA requirements by not including the project’s reasonably foreseeable environmental impacts.

The D.C. Circuit agreed with the petitioners. The Supreme Court granted certiorari.

Holding: NEPA does not impose substantive limits on agencies’ decisions, requiring that agencies be given “substantial deference” in determining the scope and detail of their environmental impact statements. Environmental impact statements are extremely fact and context-dependent, and as such it is not the role of the court “to micromanage those agency choices so long as they fall within a broad zone of reasonableness.”

While it is possible for impacts which occur outside the project’s geographic area or construction timeframe to be required in an environmental impact statement, it is not required in this case because the upstream and downstream effects are geographically removed, are not proximately caused by the project, and fall outside the Surface Transportation Board’s regulatory authority.

These factors lack the “reasonably close causal relationship” necessary to be required in an environmental impact statement. The opinion further stated that including these upstream and downstream effects would hinder infrastructure development and the associated construction. The lower court was reversed and the Surface Transportation Board’s decision was upheld.

Concurrence: The Surface Transportation Board lacks the authority to regulate downstream and upstream activities, and need not analyze these impacts it is unable to prevent under its organic statute.

Impact: Seven County is expected to expedite NEPA approval for all federal projects. NEPA has long been controversial for what some perceive to be an overstretching of its procedural mandate as a substantive roadblock, with many welcoming this decision as removing unnecessary bureaucratic hurdles which hinder necessary development.

Amidst an administration that is unfriendly to renewable energy projects (e.g. Executive order 14154, which pauses disbursement of federal funds already earmarked for the “green new deal” energy projects) and a boom in fossil fuel demand brought on by increased energy usage from A.I., there is concern that Seven County will do more to foster fossil fuel-related projects than their renewable counterparts.

Here are salient excerpts from the Court’s opinion which emphasize the new principles at play:

The D. C. Circuit failed to afford the Board the substantial judicial deference required in NEPA cases and incorrectly interpreted NEPA to require the Board to consider the environmental effects of upstream and downstream projects that are separate in time or place from the Uinta Basin Railway.... As a purely procedural statute, NEPA “does not mandate particular results, but simply prescribes the necessary process” for an agency’s environmental review of a project…Some federal courts reviewing NEPA cases have assumed an aggressive role in policing agency compliance with NEPA and have not applied NEPA with the judicial deference demanded by the statutory text and the Court’s cases. When, as here, a party argues that an agency action was arbitrary and capricious due to a deficiency in an EIS, the “only role for a court” is to confirm that the agency has addressed environmental consequences and feasible alternatives as to the relevant project….Further, the adequacy of an EIS is relevant only to the question of whether an agency’s final decision (here, to approve the railroad project) was reasonably explained.

Courts should defer to agencies’ discretionary decisions about where to draw the line when considering indirect environmental effects and whether to analyze effects from other pro jects separate in time or place…. In sum, when assessing significant environmental effects and feasible alternatives for purposes of NEPA, an agency will invariably make a series of fact-dependent, context specific, and policy-laden choices about the depth and breadth of its inquiry—and also about the length, content, and level of detail of the resulting EIS. Courts should afford substantial deference and should not micromanage those agency choices so long as they fall within a broad zone of reasonableness. Even a deficient EIS does not necessarily require vacating an agency’s project approval, absent reason to …believe that the agency might disapprove the project if it added more to the EIS….

Contrary to the D. C. Circuit’s NEPA analysis, the Board’s determination that its EIS need not evaluate possible environmental effects from upstream and downstream projects separate from the Uinta Basin Railway complied with NEPA’s procedural requirements, particularly NEPA’s textually mandated focus on the “proposed action” under agency review. While indirect environmental effects of the project itself may fall within NEPA’s scope even if they might extend outside the geographical territory of the project or materialize later in time, the fact that the project might foreseeably lead to the construction or increased use of a separate project does not mean the agency must consider that separate project’s environmental effects…. This is particularly true where, as here, those separate projects fall outside the agency’s regulatory authority….NEPA does not allow courts, “under the guise of judicial review” of agency compliance with NEPA, to delay or block agency projects based on the environmental effects of other projects separate from the project at hand.

This Supreme Court decision narrows the scope of environmental review under NEPA, with much of NEPA’s power left to expected agency-specific interpretation guidelines. Agencies also are empowered by a highly deferential standard of review for environmental impact statements that may not require consideration of factors that are “separate in time or space” from the proposed project, or as one justice called it, upstream and downstream impacts.

It is yet to be seen exactly when and how courts will require that these facts and factors be included in an environmental impact statement. It is notable that this language substantially deviates from the previous standard that “reasonably foreseeable impacts” should be included in an environmental impact statement, not to mention the Supreme Court’s decisions abrogating the Chevron Doctrine about court deference to agencies.

A longtime Co-chair of REBA’s Environmental Law Section, Greg McGregor practices with McGregor Law Group PC.  He can be contacted at gimcg@mcgregorlaw.com.

 

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