DISPUTE RESOLUTION: Tort Litigation: Reforming NEPA Review of Energy Projects

by King & Spalding

[authors: Jim Vines, Stephanie Salek, Kelsey Desloover]

The President’s re-election once again focused attention on the question of whether the Administration will grant the Presidential permit necessary for the U.S.-Canada border crossing of the Keystone XL pipeline. While Keystone XL is of high interest in its own right, the controversy also suggests equally important but much broader questions about the overall impact of National Environmental Policy Act (NEPA) review and the associated NEPA litigation frequently initiated by Non-Governmental Organizations (NGO) to challenge conventional energy projects. As might be expected, preliminary research on this issue reveals that NEPA review and related litigation tie up billions of dollars of investment and slow job growth by delaying energy projects or making them uneconomical to complete altogether.

The statutory requirements for NEPA review are clearly costly and time consuming. Once it is determined that an energy project involves a “major federal action,” NEPA requires the authorizing agency or agencies to evaluate the potential environmental effects of the project in an Environmental Assessment (EA), in which agencies must take a “hard look” at a project’s potential impact on the environment. After preparing an EA, the agency may issue a Finding of No Significant Impact (FONSI) if the environmental impacts are determined to be insignificant. Alternatively, if the agency determines the project “significantly affect[s] the quality of the human environment,” it must prepare a more detailed Environmental Impact Statement (EIS).[1]

According to a 2003 federal report, a typical EA required nine to eighteen months to prepare at a cost of $50,000 to $200,000, and a typical EIS required six years to complete at a cost of $250,000 to $2 million.[2] In total, federal agencies initiate approximately 50,000 EAs and 350 EISs per year.[3] There is no evidence that NEPA obligations have become shorter or cheaper since 2003.

But the delays and costs do not stop with an agency’s performance under the statute; once an agency prepares an EA and either an EIS or FONSI, NGOs and other stake holders can initiate litigation under NEPA to challenge the adequacy of the agency’s review. An average of 126 new NEPA cases were filed each year between 2001 and
2009.[4] Furthermore, an average of 24 Temporary Restraining Orders (TRO) and preliminary and permanent injunctions halting projects were issued each year between 2001 and 2009.[5] In general, NEPA plaintiffs succeed in winning NEPA cases more often than pro-development interests.[6] And NEPA plaintiffs have six years after a “final agency action”[7] to initiate litigation challenging the project, per the Administrative Procedure Act’s (APA) statute of limitations. In one instance, the near-certainty that a project’s permits would eventually be litigated under NEPA motivated Shell Oil Company to file a lawsuit challenging its own project in order to avoid waiting six years for adversaries to file suit before the statute of limitations expired.[8]

Discussions are afoot to explore possible resolutions to the ongoing dispute regarding obstacles posed by this use of NEPA. For instance, the U.S. Chamber of Commerce is encouraging NEPA reform. In a nationwide study of energy projects being stalled, stopped, or killed due to environmental activism, the Chamber found that the 351 projects it identified would have created 1.9 million jobs and produced a nearly $1.1 trillion boost to the economy if these projects were allowed to go forward.[9] At least 20 states have adopted NEPA-like statutes, some more stringent than NEPA itself. Additional suggestions have been made that the overlapping requirements and lengthy project delays make NEPA and its state equivalents ripe for reform. California’s Environmental Quality Act (CEQA), for example, requires agencies to go beyond NEPA’s basic requirements and not only identify significant environmental impacts, but also avoid or mitigate those impacts when possible. Some California lawmakers have asserted that that CEQA lawsuits, like NEPA lawsuits, are often filed not for the purpose of integrating environmental protection into the project development process, but rather to simply delay the project with the hope of killing it entirely.[10] Advocates of CEQA reform have expressed a goal of “preserving the law’s strengths while improving the measure to root out abuses that stifle the economy.”[11] Some of the proposed changes to CEQA could be applied to reform NEPA, as well. For example, California lawmakers suggest narrowing CEQA’s requirements and applicability, increasing exemptions, streamlining information provided for environmental reviews, and making it more difficult to use the courts to challenge projects that are found to have no significant adverse impacts on the environment.[12]

These and other reforms - such as designating a shorter statute of limitations specifically applicable to NEPA litigation - are changes that could be considered to ensure that NEPA serves its intended purpose of environmental protection, and does not operate as a blunt instrument of project elimination.
[1] The National Environmental Policy Act of 1969, 42 USC § 4332(C).
[2] Arnold W. Reitse, The Role of NEPA in Fossil Fuel Resource Development and Use in the Western United States, 39 B.C. Envtl. Aff. L. Rev. 283, 385 (2012).
[3] NEPA: Lessons Learned and Next Steps, 109th Cong. 7-8 (2005) (statement of James L. Connaughton, Chairman, Council on Environmental Quality).
[4] CEQ records available at: ceq.hss.doe.gov/neap/NEPA[year]LitigationSurvey.pdf.
[5] Id.
[6] Judging NEPA: A "Hard Look" at Judicial Decision Making Under the National Environmental Policy Act, Environmental Law Institute (2004).
[7] What constitutes a “final agency action” under the APA can be very nuanced and is often determined on a case-by-case basis in the context of NEPA litigation. See 5 USC § 704.
[8] Statement of the U.S. Chamber of Commerce, H.R. 4377, The “Responsibility and Professionally Invigorating Development (RAPID) Act”, at 12, n.21 (2012).
[9] Steve Pociask and Joseph P. Fuhr Jr., Progress Denied: A Study on the Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects, Project No Project, at 1, 5.
[10] See CEQA Reform Moves Forward – Action Needed!, Cal. Chamber of Comm. (Aug. 22, 2012) (available at www.calchamber.com/headlines/pages/08252012-ceqareformmovesforwardactionneeded.aspx); Erin Coe, Overhaul May Be On Horizon For Calif. Environmental Law, Law360 (Nov. 14, 2012).
[11] Steinberg Sets CEQA Reform as Agenda Priority (Sept. 13, 2012) (available at sd06.senate.ca.gov/news/2012-09-13-steinberg-sets-ceqa-reform-agenda-priority).
[12] See supra note 10.

  James K. Vines
  Washington, D.C.
  +1 202 383 8921

  View Profile »


Stephanie L. Salek
Washington, D.C.
+1 202 626 5528

View Profile »

  Kelsey A. Desloover
  Washington, D.C.
  +1 202 626 5608

  View Profile »



DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.