Legal observers say the case ruling could have far-reaching ramifications for project permitting under the National Environmental Policy Act (NEPA). Environmental advocates contend that case petitioners—project developers and seven nearby counties—seek to weaken the law's bedrock environmental protections, but the challengers say the rail project received appropriate federal agency approvals and should move forward with the oil development. 

“We remain committed to advancing this critical infrastructure that aims to unlock economic opportunities and support the region’s long-term development," said an emailed statement from the Seven County Infrastructure Coalition.  

But said Sam Sankar, Earthjustice senior vice president of programs: “This case is bigger than the Uinta Basin Railway. The fossil fuel industry and its allies are making radical arguments that would blind the public to obvious health consequences of government decisions." He added that the high court "should stick with settled law instead. If it doesn’t, communities will pay the price.”

The Natural Resources Defense Council said a planned pipeline would enable Uinta Basin crude oil producers to potentially quadruple their output, adding up to 350,000 barrels per day of new oil extraction.  

How the court rules could have significant impact on design of environmental reviews for projects—ranging from those for pipelines by the Federal Energy Regulatory Commission to U.S Army Corps of Engineers' Clean Water act permitting, said Larry Liebesman, a former U.S. Justice Dept. attorney who has litigated NEPA challenges and other environmental permitting cases. He now is a senior advisor at Dawson & Associates, a Washington, D.C.-based policy consultant specializing in environmental permitting and related issues. 

“I expect the court to come up with compromise test between the very broad analysis by the [Washington, D.C. federal appeals court] favored by the enviros … and the much more limited approach favored by industry,” he said.

Challenge to D.C. Court Ruling

The U.S. Surface Transportation Board completed its environmental impact statement in 2021 and approved the railway to begin construction in 2022. But Eagle County, Colo., along with environmental groups, filed a legal challenge, claiming the board analysis violated NEPA by failing to fully consider the project's potential harm to the Colorado River and to environmental justice communities along the Gulf Coast. 

The appeals court upheld a lower court ruling that sided with the environmental groups. 

In arguments before the justices, Paul D. Clement, representing the infrastructure coalition, and Edwin S. Kneedler, deputy solicitor general, separately argued that the appeals court opinion should be thrown out. 

Clement noted that the transportation board had produced an environmental impact statement spanning more than 3,000 pages, with 20 appendices addressing major and minor impacts, as well as downline and cumulative impacts. He said being forced to consider impacts so remote in time or space and outside the jurisdiction of the agency conducting the review and that performing additional analyses was unnecessary and could stall projects indefinitely. 

He called for a clear two-part test that courts could use to provide guidance to agencies conducting reviews. Clement said impacts that are so remote in time and space that they fall under another agency’s jurisdiction do not need to be considered. 

Kneedler, representing the federal government's position also in support of the coalition on the same point, did not call for such a precise test but instead advocated for giving deference to expertise of the agencies overseeing the reviews.  

William M. Jay, speaking on behalf of Eagle County and the environmental groups countered: “The impacts at issue here are reasonably foreseeable consequences of this $2-billion railway project whose entire rationale is to transport crude oil.” He added that "reasonable foreseeability" is the test agencies must use since NEPA was enacted in 1970. 

The case is being closely watched by construction industry groups. 

Associated General Contractors of America General Counsel Leah Pilconis said in an email that projects are often delayed for years after lawsuits by people far removed from the actual projects. “The justices seem receptive to reining in some of the more extraneous analysis of remote effects or those impacts that may stretch the definition of ‘reasonably foreseeable,’" she said. "This is heartening, but it is too early to be confident, which is why AGC is also working on Capitol Hill and will work with the incoming Trump administration on permitting reform.”