Supreme Court Permitting Decision Helps Trump Speed Projects

Large, complex projects favored by the Trump administration such as mines and semiconductor factories stand to benefit from the Supreme Court’s recent decision limiting the scope of environmental reviews.

Those projects are typically the biggest and hardest to permit under the National Environmental Policy Act, due to their size and impacts on the air, water, land, endangered species, tribal resources, climate, and economy.

The Trump administration’s official policy calls for more mining of critical minerals, more investment in data centers to fuel AI demand, and more manufacturing. All of those efforts require environmental permits.

Agencies traditionally spend years preparing environmental reviews, being careful to consider a wide range of downstream impacts so their decisions don’t get challenged in courts.

Thursday’s 8-0 ruling in Seven County Infrastructure Coalition v. Eagle County, Colorado puts limits on which environmental impacts courts can require agencies to look at when making permitting decisions, on the grounds that "'[t]he textual focus of NEPA is the ‘proposed action'—the project at hand—not other separate projects,” wrote Justice Brett Kavanaugh.

A narrower focus should mean agencies can make permit decisions faster, and reviews will be of higher quality because they can focus on a narrower set of facts, said Jay Johnson, a partner at Venable LLP, which represented the plaintiff.

“I think the message the court was sending is, the courts have to stop nitpicking agency decisions,” Johnson said. “That should free the agencies to be more focused in their review process. So if you’re the Surface Transportation Board and you’re deciding whether to allow a railroad to be built, you can focus on effects that are relevant to railroads, not effects that are relevant to burning oil four or five states away.”

Limiting Scope

The case examined whether the STB must consider the potential effects a rail line in Utah would have on communities in the Gulf Coast.

“One of the biggest challenges for agencies doing NEPA reviews is knowing where to stop,” said Michael Drysdale, a partner at Dorsey & Whitney LLP.

Historically, agencies have been governed by a “reasonably foreseeable” standard, but that standard is laden with uncertainty.

“There can be a lot of effects that are remote in place and time that are nonetheless pretty reasonably foreseeable,” Drysdale said. “So there are disagreements over whether the line has been drawn properly.”

If courts now shift their focus on agency authority, “that’s an easier line for the agency to draw, which results in less analysis and less things to fight over,” he said.

Sen. Shelley Moore Capito (R-W.Va.), chairman of the Senate Environment and Public Works Committee, said the decision “validates what my colleagues and I have long been saying, that NEPA obligations have been utilized beyond their scope to create roadblocks for infrastructure projects instead of protecting the environment.”

Reviews that are focused on the impacts of the project at hand, “instead of hypotheticals,” means key infrastructure projects like pipelines, roads, and energy can move faster, Capito said.

Setback for Green Groups

The ruling dealt a blow to environmentalists and community groups, who often challenge agency permits on the grounds they didn’t consider certain impacts thoroughly enough, if at all.

“Fossil fuel infrastructure projects do not exist in a vacuum and have far-reaching impacts on communities, especially those on the front lines of climate change or those who face serious health harms from increased pollution,” Nathaniel Shoaff, senior attorney at the Sierra Club, said in a statement.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

Venable LLP’s Johnson dismissed that concern, saying the Supreme Court decision doesn’t deny big projects can have downstream effects.

“But that’s not the STB’s job,” he said, referring to the agency at the heart of the litigation. “The STB’s job is to decide whether this railroad is meeting the STB’s regulatory standards. Other agencies have other jobs, and I think it’s reasonable to assume those agencies will do their jobs.”

Eric Beightel, who led the Federal Permitting Improvement Steering Council under former President Joe Biden, broadly agreed with that assessment.

“It stands to reason that, if there are effects directly related to the proposed action that require federal authorization from a permitting agency that is not the lead agency, those effects will be assessed in the scope of NEPA and we’ll carry on as we always have,” Beightel said.

The decision doesn’t completely remove environmental groups’ ability to challenge projects on the grounds that permitting agencies didn’t take climate change impacts into account, said Larry Liebesman, a senior adviser at Dawson and Associates.

“The NEPA analysis says, ‘FERC, you have a licensing obligation on a refinery, or natural gas pipeline, and therefore that’s an immediate effect you have to consider,’” Liebesman said, referring to the Federal Energy Regulatory Commission. “What it removes are these attenuated indirect effects of unrelated projects.”

Permitting Wins

The decision was the latest in a string of wins for the Trump administration as it tries to fast-track construction in favored sectors.

In February, a North Dakota District Court ruled that the White House doesn’t have the authority to issue government-wide permitting rules under NEPA.

That decision led the Trump administration to erase a 50-year old regulation telling agencies which factors they had to consider when contemplating permit applications.

The White House has since started harmonizing the way agencies handle permitting. Some environmentalists fear the rewrite will have the effect of exempting as many projects as possible from review.

A guidance document dated April 8 advises agencies to exempt certain kinds of projects, in one place suggesting they "[i]nsert a list of examples from agency experience that the agency knows will usually or always trigger an EIS,” referring to an exhaustive type of review known as an environmental impact statement.

“Many agencies already have such a list in their existing NEPA procedures,” the document reads. It further advises agencies to “consider distilling from that list a presumptive (but nonbinding) monetary threshold above which an action will be deemed ‘major.’”