The U.S. Supreme Court has decided to hear a case that could have far-reaching implications for future energy infrastructure projects in the country by establishing the limits to federal agency power over emission assessments.
On the face of it, the case is small. It concerns an 88-mile railway that would carry oil and other commodities from northeast Utah to markets. The project was approved by the Surface Transportation Board but an appeals court in Washington D.C. nixed that approval, citing "numerous" violations of the National Environmental Policy Act in the project's review.
The case was brought to the appeals court by environmentalist organizations but now supporters of the $1.5-billion project are fighting back, challenging what they suggest is overarching powers. In their request for the hearing, the groups behind the Uinta Basin Railway project asked the judges to have their say on whether the National Environmental Policy Act gives federal agencies power "beyond the proximate effects of the action over which the agency has regulatory authority."
The case bears some similarity to one that a UK court recently decided in favor of the environmentalist plaintiffs. The case focused on the issuance of new drilling permits for an onshore oil field in England, near Heathrow Airport. Regulators had granted the permits but activists challenged that approval on the grounds that it did not consider the full spectrum of emissions from the project, only focusing on the immediate emissions from the oil extraction activity alone.
The ruling was considered a major victory for climate activists, setting a precedent for more legal challenges to oil and gas activity in the country. In the U.S., meanwhile, it appears that federal courts of appeal have differing views on how far the powers of federal agencies extend with regard to environmental assessments.
This is why the Uinta Basin Railway backers approached the Supreme Court, citing those differences, with five courts holding the view that a federal agency's powers end where its statutory authority ends. The D.C. court where the activists filed their case, however, was one of two who hold a different opinion, requiring an agency to consider all foreseeable impacts of a project on the environment.
By Charles Kennedy for Oilprice.com
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