The Supreme Court wants to make it easier to build

The Supreme Court handed down an opinion on Thursday that reads like it was written by Ezra Klein and Derek Thompson, the authors of an influential book arguing that excessive regulation of land use and development has made it too difficult to build housing and infrastructure in the United States. (Ezra is also a co-founder of Vox.)

Seven County Infrastructure Coalition v. Eagle County, Colorado concerns a proposed railroad line that would run through 88 miles of Utah, connecting the state’s oil-rich Uinta Basin to the broader national rail network. The line is expected to make it easier to transport crude oil extracted in this region to refineries elsewhere in the country. The Court’s opinion in Seven County places strict new limits on a federal law that a lower court relied upon to prevent this line from being constructed — limits that should make it easier for developers to build large-scale projects.

Before this rail project can move forward, it must be approved by the Surface Transportation Board. Under the National Environmental Policy Act (NEPA), moreover, this board is required to produce an environmental impact statement, which identifies any significant environmental effects from the rail project as well as ways to mitigate those effects.

Significantly, as Justice Brett Kavanaugh explains in the Court’s Seven County opinion, “NEPA imposes no substantive environmental obligations or restrictions” on the board or on any other federal agency. It requires agencies to identify potential environmental harms that could arise out of development projects that they approve, but once those harms are identified in an environmental impact statement, the agency is free to decide that the benefits of the project outweigh those harms.

Nevertheless, NEPA is often a significant hindrance to land development because litigants who oppose a particular project — be they environmental groups or just private citizens looking to shut development down — can often sue, claiming that the federal agency that must approve the project did not prepare an adequate environmental impact statement. As a result, Kavanaugh writes in his Seven County opinion, “litigation-averse agencies...take ever more time…to prepare ever longer EISs for future projects.”

Indeed, the Seven County case itself is a poster child for just how burdensome NEPA can be. The Surface Transportation Board produced an environmental impact statement that is more than 3,600 pages, and it goes into great detail about the rail line’s potential impact on topics ranging from water quality to vulnerable species, such as the greater sage-grouse.

Nevertheless, a federal appeals court blocked the project because it determined that this 3,600-page report did not adequately discuss the environmental impacts of making it easier to extract oil from the Uinta Basin. The appeals court reasoned that the agency needed to consider not just the direct environmental impacts of the rail line itself but also the impact of increased drilling and oil refining after the project is complete.

All eight of the justices that heard the Seven County case (Justice Neil Gorsuch was recused) agreed that this appeals court decision was wrong, although Kavanaugh’s majority opinion for himself and his Republican colleagues is broader than a separate opinion by Justice Sonia Sotomayor.

The justices’ agreement in Seven County, moreover, mirrors a growing bipartisan consensus that NEPA has become too much of a burden to development. As Kavanaugh notes in his opinion, President Joe Biden signed legislation in 2023 that limits environmental impact statements to 150 pages and requires them to be completed in two years or less.

Still, Kavanaugh’s opinion goes even further, repeatedly instructing courts to be deferential to an agency’s decision to greenlight a project after producing an environmental impact statement.

One striking thing about Kavanaugh’s opinion is how closely it mirrors the rhetoric of liberal proponents of an “abundance” agenda, which seeks to raise American standards of living by promoting large infrastructure projects.

These proponents often claim that well-meaning laws intended to advance liberal values can have the opposite effect when they impose too many burdens on developers. As Kavanaugh argues, NEPA has “transformed from a modest procedural requirement into a blunt and haphazard tool” that even stymies clean energy projects ranging “from wind farms to hydroelectric dams, from solar farms to geothermal wells.”

Broadly speaking, Kavanaugh’s opinion imposes two limits on future NEPA lawsuits. The first is simply a blunt statement that courts should be highly reluctant to second-guess an agency’s decision that it has conducted an adequate environmental review. As Kavanaugh writes, “the bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.”

Kavanaugh also criticizes the appeals court for blocking one project — the Utah rail line — because of the environmental impacts of “geographically separate projects that may be built” as a result of that rail line, such as an oil refinery elsewhere in the country.

As Kavanaugh writes, “the effects from a separate project may be factually foreseeable, but that does not mean that those effects are relevant to the agency’s decisionmaking process or that it is reasonable to hold the agency responsible for those effects.”

Both Kavanaugh and the separate opinion by Sotomayor also point to the fact that “the Board here possesses no regulatory authority over those separate projects.” That is, while the transportation board is tasked with approving rail lines, other agencies are in charge of regulating projects, such as oil wells or refineries.

As Sotomayor writes, an agency is not required to consider environmental harms that it has “no authority to prevent.”

So Seven County is a fairly significant victory for land developers as well as for traditional libertarians and for liberal proponents of an abundance agenda. It significantly weakens a statute that has long been a bête noire of developers.