How the Supreme Court viewed Colorado’s challenge to a Utah oil railroad — and what could be next

Anglers fish on the Colorado River near an idle Union Pacific freight train in western Grand County on June 12, 2023. (Chase Woodruff/Colorado Newsline)

With thousands of pages of briefs filed and two hours of oral argument completed on Tuesday, Chief Justice John Roberts of the U.S. Supreme Court declared the case known as Seven County Infrastructure Coalition v. Eagle County formally “submitted.”

Now the fates of both the Uinta Basin Railway, a proposed 88-mile railroad in eastern Utah, and the National Environmental Policy Act, a landmark 1970 federal law requiring federal agencies to study the environmental risks of major decisions, are in the hands of the court’s justices, who will deliberate behind closed doors in the weeks and months to come. But on both fronts, the outcome of a Supreme Court ruling may not be as clear-cut as some parties to the case had wished.

Approved by federal regulators in 2021, the Uinta Basin Railway would connect Utah’s largest oil field to the national rail network, allowing drillers there to ship up to 350,000 barrels of oil per day in tanker cars through Colorado. In some parts of the state, that would result in up to a tenfold increase in hazmat rail traffic.

Colorado’s Eagle County and five environmental groups sued to overturn the project’s approval, alleging its environmental analyses were insufficient under NEPA, and they prevailed in a lower court. The railway’s proponents, with support from conservative business groups who have long targeted NEPA for reform, appealed the case to the Supreme Court, asking justices not only to declare the project’s review sufficient but to impose strict limits on how the law is applied going forward.

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Most controversially, the argument put forward by the Seven County Infrastructure Coalition — the group of Utah county governments backing the railway — proposes to limit the scope of NEPA reviews based in part on “proximate cause” principles borrowed from tort law, the area of law relating to legal liability.

Environmental groups call that idea “absolutely bonkers” — and by and large, the Supreme Court showed little interest in adopting it wholesale during oral argument on Tuesday.

“I have trouble seeing how this is going to work out as a practical matter,” Roberts, widely viewed the most moderate of the court’s six Republican-appointed justices, told Paul Clement, the attorney representing the SCIC.

The railway’s opponents say the project’s lengthy environmental impact statement failed to properly analyze risks in multiple categories, including the “upstream” impacts of expanded oil and gas production in the Uinta Basin itself; the “downstream” impacts of increased oil refining on the Gulf Coast, where much of the basin’s product would be shipped; and “downline” impacts such as increased risk of accidents, spills and wildfires on Colorado’s main east-west railroad, which would carry 90% of the resulting oil-train traffic.

Under the petitioners’ proposed “proximate cause” standard, none of those impacts would be properly considered in a NEPA review, Clement said.

“Nobody in their right mind would say that a project in northeastern Utah is the legally relevant cause, or the proximate cause, of additional pollution in Shreveport, Louisiana,” he said.

But under repeated questioning from justices, Clement struggled to concisely articulate the specifics of the new test the petitioners propose to replace the standard that currently governs the scope of NEPA reviews, which instructs federal agencies to study the “reasonably foreseeable” effects of major decisions. Clement suggested that relevant factors include whether an effect is “remote in time or space,” and whether it’s regulated by a different federal agency.

“If I could give you a 10-word test that took care of every hard case, they’d give me tenure at Harvard,” Clement joked.

A ‘poor vehicle’?

The Supreme Court’s announcement in June that it had agreed to hear the SCIC’s appeal caught many observers by surprise. Ahead of Tuesday’s hearing, some legal analysts and environmental advocates floated the possibility that the court would take the unusual step of dismissing the case as “improvidently granted.”

“It’s a really poor vehicle for getting at the law,” said Andrew Mergen, a Harvard professor of environmental law, who briefly worked on the case in an earlier phase before leaving the Department of Justice in 2022. “I think it’s very surprising that the court took this case.”

There was little indication during Tuesday’s oral argument, however, that the court was mulling such a dismissal. Justices appeared broadly open to reining in the scope of NEPA reviews, inviting both Clement and deputy solicitor general Edwin Kneedler to articulate what sort of “guidance,” as Clement put it, a decision in the case should give lower courts adjudicating NEPA challenges.

“By the courts taking an overly aggressive role, it’s in turn created an incentive for the agencies to do 3,000-page environmental impact statements,” said Justice Brett Kavanaugh.

Justice Amy Coney Barrett noted the NEPA reforms passed by Congress in 2023, including a 150-page limit on the main text of a project’s environmental impact statement — the Uinta Basin Railway’s EIS ran to over 600 pages — and new procedural deadlines.

“It’s going to be impossible for agencies to consider as many downstream and upstream effects as they did in this case, just because of the procedural constraints,” Barrett said. “So what can we add?”

The federal government has staked out a middle ground in the case, asking the court to issue a narrow ruling, arguing that the Court of Appeals for the D.C. Circuit “erred” in vacating the railway’s approval but maintaining that the petitioners’ proposed reshaping of NEPA goes too far.

William Jay, a partner at the D.C.-based Goodwin Law Firm, argued the case for Eagle County, on behalf of all respondents in the case. The respondents want the court to affirm the lower court’s ruling against the railway’s approval, and leave its interpretation of NEPA unchanged.

The “entire purpose” of the Uinta Basin Railway, Jay said, is to transport waxy crude oil from the Uinta Basin to Gulf Coast refineries. That unique circumstance means impacts like expanded oil and gas development, increased refinery emissions and accident risks on Colorado railroads fit well within the “reasonably foreseeable” test.

“The whole raison d’etre of this project is to transport one commodity and one commodity only,” Jay said. “That won’t be the case in many other railroad projects. It’s a little bit misleading for Mr. Clement to suggest this is (just) an 88-mile railroad, as if the train just went back and forth for 88 miles. It’s a connection to the national rail network whose entire purpose was to bring this crude oil to the market.”

A rare recusal

Only eight justices were present for Tuesday’s oral argument. The ninth, Colorado native Justice Neil Gorsuch, abruptly recused himself from the case last week.

Though Gorsuch’s brief notice via a court clerk that he had “determined that he will not continue to participate in this case” cited the Supreme Court’s recently adopted code of conduct, it did not elaborate on the reasons for his recusal. But it comes after years of scrutiny over his ties to conservative Colorado billionaire Phil Anschutz, whose oil and gas company, Anschutz Exploration Corporation, filed a brief in support of the petitioners’ case.

An October letter from more than a dozen environmental and watchdog groups called Gorsuch’s relationship with Anschutz a conflict of interest that was “just the latest example of countless violations in the years-long Supreme Court ethics crisis.”

A judicial ethics watchdog told the New York Times that Gorsuch’s apparent recusal over a personal relationship was “very rare.”

Gorsuch’s absence could be pivotal in the case, if the court’s remaining five conservative members are unable to reach a consensus on a decision. In the event of a 4-4 split, the lower court’s ruling would stand.

In Utah, politicians see an opportunity to reform NEPA and boost the energy industry

Some of Utah’s most influential politicians are staunch supporters of the railway, which they say will be an economic boon to the region, allowing the state to export far more oil than is currently refined in Salt Lake City. The market capacity for the Salt Lake refineries is 85,000 barrels per day — if completed, the railway could transport three times that amount.

What’s more, many of the Beehive State’s elected officials see the case as a chance to scale back the environmental review process as required by NEPA. Environmental groups worry that will result in the government making decisions with limited understanding of the environmental impacts. “Based on the history of environmental law, that will inevitably lead to more pollution, more health impacts, more loss of biodiversity and greater injuries to climate,” said Sam Sankar, the senior vice president of programs for Earthjustice, which is representing the environmental groups. 

But many Utah politicians say the review process has been weaponized by environmental groups, who challenge infrastructure projects in court by claiming agencies were not thorough enough in their analysis.

That includes Utah Gov. Spencer Cox, who has long held grievances against permitting processes outlined in NEPA. Speaking at a Western Governors Association event on Monday, Cox said litigation can delay infrastructure projects by years.

“My background is in telecom,” said Cox, whose family founded the Utah-based telecommunications company CentraCom. “I worked a lot with permitting in telecom, and we would sometimes build our routes 20 miles or more around a piece of federal land just to avoid having to go through this process, which adds an insane amount of cost and work.”

Cox, an ardent supporter of the railway, said the case is “critical to advancing energy projects in Utah and across the country.”

“We’re hopeful the Supreme Court will affirm our efforts and recognize what’s at stake — not just for Utah, but for America’s energy independence and economic vitality,” Cox said on Tuesday.

Both of Utah’s Republican senators, Mike Lee and Mitt Romney, echoed Cox in an amicus brief, or a “friend of the court” brief, filed with the court in September.

“As courts grade agency essays and spawn case after case, the Nation’s infrastructure decays, its economy suffers, and its foreign adversaries benefit,” the brief reads. 

In an interview last week, Greg Miles, a Duchesne County Commissioner who sits on the board of the Seven County Infrastructure Coalition, said he was feeling optimistic about the case.

“Having the ability to move goods in and out of the basin, it would be a game changer for us as an economy,” said Miles. “So if we’re successful at the Supreme Court, or if we’re not successful, we’re going to continue to fight to see this rail project built.”

Kathleen Sgamma, president of the Western Energy Alliance, said she was hopeful that the case could be a chance to reform some of the environmental review process. But she said the justices, while sympathetic to the Seven County Infrastructure Coalition, “seemed much more reluctant to take on the larger issue of providing some guardrails around NEPA analyses.”

“After consulting with 27 federal, state, tribal, and local agencies; specifying 91 mitigation measures; and obtaining an additional 56 voluntary actions, the Surface Transportation Board met the standards of NEPA,” said Sgamma, whose organization advocates for oil and gas exploration and production in Western states. “But it is unclear if the court will provide a clear test that lower courts and agencies can use.” 

The stakes for Colorado

Underneath the thickets of federal environmental regulations and judicial precedents at issue in the case are vivid fears among many Coloradans over the increased risk of accidents, spills and fires in some of the state’s most fragile and scenic landscapes.

“Each train from the Uinta Basin will bring over two miles of rail cars filled with flammable waxy crude oil through (our communities) on a daily basis,” more than a dozen Colorado local governments wrote in a joint Supreme Court brief in October. “The risk of rail accidents will more than double on the (existing) Union Pacific Line as a result of the board’s decision … including possible derailments and spills contaminating the invaluable water supplies on which western communities depend.”

“Anyone who has spent time along the Colorado River understands what the risks really are for our environment, our local economies, and our state,” Democratic U.S. Sen. Michael Bennet said in a statement at the time. Bennet wrote in a social media post Tuesday that he will “continue standing with community and local leaders to oppose (the project).”

As part of their petition to the Supreme Court, the railway’s proponents have asked justices to affirm that the project’s EIS was sufficient in its entirety. Federal regulators were ordered by the D.C. Circuit to correct several other smaller deficiencies, and those proceedings will need to be undertaken regardless of how the Supreme Court rules. But upholding the EIS, rather than reopening what could become another lengthy review process, would go a long way toward putting the railway’s construction back on track.

In arguing its case, the Seven County Infrastructure Coalition has focused extensively on what it characterizes as the impracticability of studying more remote “downstream” effects like greenhouse gas emissions or Gulf Coast refinery pollution. But Eagle County and the environmental groups are adamant that the “question presented” to the Supreme Court by the coalition does not include the more immediate “downline” effects of sharply increased rail traffic in Colorado in close proximity to the proposed line.

“The agency reviewed, and found foreseeable, the downline impacts,” said Jay. “We obviously don’t think those are within the question presented, but it’s striking that petitioners are taking a view of what the agency should have studied that is considerably narrower than the agency itself.”

But while the federal government agrees — “we didn’t understand the question presented to cover the downline effects,” Kneedler said — the petitioners disputed the point again during a brief rebuttal at the conclusion of Tuesday’s hearing, reiterating their request for the EIS to be deemed sufficient in full.

“I think the entire environmental impact statement, and whether or not you have to consider effects that are not proximate and are in the jurisdiction of another agency, is properly before you,” Clement told the justices. “The question presented doesn’t distinguish between ‘downline’ and ‘downstream.’”

Utah News Dispatch reporter Kyle Dunphey contributed to this report.

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