[co-author: Alexia Zolenski, 2025 Summer Associate]
New NEPA Limits on the Horizon
It has been a year of major change for the National Environmental Policy Act (NEPA), marked by various court decisions, executive orders, and the Council on Environmental Quality’s (CEQ) total rescission of its half-century of implementing regulations. That trend of NEPA rollbacks is unlikely to end soon. Most recently, on May 29, the U.S. Supreme Court issued a unanimous (8-0) decision in Seven County Infrastructure Coalition v. Eagle County. The decision not only limits the role of courts in reviewing agencies’ NEPA analyses but also narrows the required scope of the analyses themselves. Notably, it declares “[t]he bedrock principle of judicial review in NEPA cases can be stated in one word: Deference.” The ruling will likely produce faster and shorter NEPA reviews and make it far more difficult to challenge or delay projects under NEPA.
The Supreme Court’s decision comes one day after CEQ withdrew the latest (2023) “Interim Guidance” on agencies’ consideration of greenhouse gas (GHG) emissions and climate change impacts in NEPA reviews. And based on the House of Representatives’ May 22 passage of its version of budget reconciliation legislation, Congress is halfway toward further constraining judicial review of NEPA documents.
A Railroad Is Just a Railroad: The Supreme Court’s Seven County Decision
The Supreme Court’s latest decision upheld the U.S. Surface Transportation Board’s approval of an 88-mile rail line in Utah, enabling oil extracted from the state’s Uinta Basin to be transported to Gulf Coast refineries. The Court held the Board satisfied NEPA’s requirements, reversing the D.C. Circuit’s decision that the Board impermissibly failed to consider increased oil drilling upstream and refining downstream of the proposed railroad project.
Justice Kavanaugh’s majority opinion clarifies general NEPA principles for courts around the country considering NEPA-based challenges. Emphasizing NEPA’s status as a “purely procedural” statute and chiding courts that have “engaged in overly intrusive (and unpredictable) review in NEPA cases,” the Seven County decision draws a clear line between the “project at issue” and projects “separate in time or place.” The opinion instructs that a “court may not invoke but-for causation or mere foreseeability to order agency analysis of the effects of every project that might somehow or someday follow from the current project.” The Court emphasized that the action agency’s scope of “regulatory authority” plays a key role in the proper scope of analysis. In this case, the Board had authority over railroads, but lacked authority over oil drilling and refining projects that plaintiffs and the D.C. Circuit also wanted the Board to consider under NEPA.
The Supreme Court’s admonition that “a court must be at its most deferential” when reviewing agencies’ NEPA analyses is particularly notable as a counterpoint to its recent decision in Loper-Bright, which generally reined in agency discretion by holding that courts – not agencies – decide questions of statutory interpretation. In Seven County, the Court concluded that the deferential Administrative Procedure Act standard of review applies when courts assess how agencies choose to complete a “detailed” NEPA review. This “involves primarily issues of fact,” and therefore, gives agencies broad discretion in drawing “manageable lines” both in scoping and conducting its analysis in a NEPA document.
The Court also cautioned that “[b]revity should not be mistaken for lack of detail. A relatively brief agency explanation can be reasoned and detailed; an EIS need not meander on for hundreds or thousands of pages.” An agency’s discretion extends to its determination of whether to analyze indirect effects of the “project at hand” and effects of projects “separate in time and place” (which would appear to encompass cumulative impacts, though the term does not appear in the opinion).
The Supreme Court also underscored, echoing other court decisions, that the breadth of the deference owed to agency NEPA reviews means that a found NEPA violation does not automatically mean the agency’s underlying decision should be vacated. This remedy point may further blunt frequent efforts by project proponents to utilize NEPA to seek preliminary or permanent injunctive relief against future challenges, at least until more NEPA review occurs on remand.
CEQ Withdrawal of NEPA GHG Interim Guidance
CEQ’s decision to formally withdraw guidance regarding the consideration of climate change in NEPA reviews aligns with the Seven County decision to limit agency consideration of such effects under NEPA. Climate change has often featured prominently in agencies’ NEPA analyses of effects, as well as those upstream or downstream of a project and including indirect and cumulative effects. These efforts have stemmed from past court decisions and administration policies.
The corresponding CEQ guidance has been through several iterations. The latest “Interim Guidance” issued in 2023 took a broad view of quantifying GHG emissions and the social cost of carbon for a wide range of agency actions. This latest rescission follows other Trump Administration actions to streamline NEPA and to deemphasize climate change, including both Executive Order 14154 “Unleashing American Energy” and OIRA/OMB guidance from earlier in May 2025, advising that “the circumstances where agencies will need to engage in monetized greenhouse gas emission analysis will be few to none.”
On its own, the recission of this non-binding guidance would be less consequential. But with the Supreme Court’s affirmation of agency discretion in reviewing effects that are separate in time and place, agencies now will likely use that discretion to deemphasize climate change as a relevant decision-making factor in most project reviews.
A Final Word from Congress?
NEPA is a creation of Congress, and that body has also become more active in addressing NEPA after half a century of stasis. The 2023 Fiscal Responsibility Act codified a number of NEPA best practices and reforms, and a number of unpassed permitting reform bills have proposed other changes. The current Congress is pursuing even more major change short of rescinding NEPA. Section 80151 of the reconciliation bill recently passed by the House of Representatives (called the “One Big Beautiful Bill”) essentially would enable a project proponent to pay 125% of the cost of agency preparation or oversight of a NEPA document and thereby reduce the maximum NEPA review time in half and insulate the final NEPA document from judicial review. Whether the Senate will include this provision in its version of the reconciliation bill is unclear and warrants close monitoring before the informal July 4 target for full passage and presidential signature.
[View source.]
