A recent challenge to the approval of a rail line in Utah’s Uinta Basin on the basis of a project’s impacts on the Ute Indian Tribe may serve as a litmus test for the effects of the Biden administration’s environmental justice initiatives on oil and gas projects. Although the case is still in the early stages, and a final ruling is unlikely for a year; it does highlight the importance of considering environmental justice concerns when planning oil and gas projects.
Background — Environmental Justice Under the Biden Administration
The U.S. Environmental Protection Agency (“EPA”) defines environmental justice as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations and policies.” Environmental justice considerations have become a priority under the Biden Administration. During his first week in office, President Biden issued two executive orders that direct federal agencies to promote and work toward proactively achieving environmental justice – Executive Order 13985 (Advancing Racial Equity and Support for Underserved Communities Through the Federal Government) and Executive Order 14008 (Tackling the Climate Crisis at Home and Abroad).1
On October 1, 2021, in accordance with the Biden administration’s focus on prioritizing environmental justice in the larger context of regulatory decision-making, EPA released its Draft Strategic Plan for 2022-2026 (“Strategic Plan”). The Strategic Plan emphasizes cross-agency execution on addressing climate change, environmental justice, and, as applicable to the Uinta basin rail line, addressing disproportionate effects in environmental justice communities in all written arrangements between EPA and states or tribes implementing delegated authority. The Biden administration requested $1.5 billion for its fiscal 2023 budget proposal. This includes $100 million in environmental equity programs to expand community air quality monitoring.2 Petitioners challenging the Uinta Basin rail line argue, in part, that the project fails review under the National Environmental Policy Act (“NEPA”) in light of the project’s disproportionate and adverse impact on the Ute Indian Tribe.
Surface Transportation Board approves Uinta Basin Rail Project Plan in 2021
In May 2020, the Seven County Infrastructure Coalition (“Coalition”) filed a petition with the Surface Transportation Board (“Board”) to construct and operate an approximately 85-mile rail line connecting the Uinta Basin to the national rail network.3Coalition says that this line would allow operators in the Uinta Basin to use a different method of oil transportation than trucks. According to reports, railroad hauling is less emission-intensive than trucks.4The Board approved the proposal subject to completion of an ongoing environmental review. It was issued on January 5, 2021.5
On August 6, 2021, the Board’s Office of Environmental Analysis (“OEA”), working with stakeholders, indigenous tribes and government agencies, completed its environmental analysis and released a Final Environmental Impact Statement (“FEIS”). The OEA analyzed a variety of alternatives to the project, as required by NEPA. OEA identified the preferable alternative for the rail line to avoid or minimize major environmental impacts, and recommended additional environmental conditions to reduce the project’s environmental impacts. The U.S. submitted a biological opinion on December 15, 2021. Fish & Wildlife Service on September 20, 2021, the Board granted final approval for construction and operation of the identified alternative, subject to OEA’s final environmental mitigation measures, finding that the project was in the public convenience and necessity and reaffirming its January 5 decision.6
Pending Challenge to the Rail Project in D.C. Circuit Provides an Important Environmental Justice Test Case
On February 11, 2022, the Center for Biological Diversity, Living Rivers, the Sierra Club, Utah Physicians for a Healthy Environment and WildEarth Guardians (“Petitioners”) filed a petition before the U.S. Circuit Court for the District of Columbia (the “D.C. Circuit”), asking the court to review the January 5 decision, as well as the Board’s reliance on the biological opinion generated by the U.S. Fish & Wildlife Service.7 The Petitioners assert that the rail line project violated NEPA due to the Board’s failure to consider that a likely significant increase in oil production in the region would occur, and that future greenhouse gas emissions would result from the presence of the rail line.
The Petitioners also address environmental justice concerns raised by the rail line. The rail line runs through the area where the Ute Indian Tribe resides. The Petitioners claim that the Tribe would be directly and disproportionately affected by the increase in greenhouse gas emissions from the construction of the railway line. Two species of cacti, which are culturally significant for the Tribe, will also be directly impacted, the Petitioners claim. The Petitioners allege that these considerations are not adequately addressed by the Board’s FEIS or by the Board’s approval. The Board proceeding underlying the Petitioner proceeding addressed environmental justice concerns. OEA had consulted with the Ute Indian Tribe in accordance with NEPA and the National Historic Preservation Act (“NHPA”) and did identify some potential impacts of concern. OEA developed and executed a Programmatic Agreement with the Tribe, as well as other consulting parties, to mitigate these potential impacts. It focuses on how cultural resource would be protected if a rail line was authorized by the Board. The Board’s decision further noted that it had received a letter of support for the project from the Ute Indian Tribe and ultimately found that the regulatory thresholds place reasonable limits on OEA’s impact analysis because minimal increases in train traffic on existing rail lines are not likely to result in significant additional impacts.8This section of the decision is in dispute in the D.C. Circuit case.
Next steps in the D.C. Circuit and Implications For Future Projects
Following the Petitioner’s request for review of the Board’s January 5 decision, the Surface Transportation Board and U.S. Fish and Wildlife Service have up to May 26, 2022 to respond.9 Further arguments have yet to be scheduled, but the D.C. Circuit’s issuance of a final order will likely take a year.
This case serves to remind investors and companies involved in oil and natural gas projects to be aware of the potential for citizen suits focusing on environmental justice issues and budget accordingly. The Petitioners’ issues could serve as a guideline for environmental groups for future projects or challenges. Companies should be aware that in the future oil and gas projects may need to address environmental justice concerns more directly and broadly than previously, and should plan on early community engagement, consultation with a team of legal and technical advisors, and use of screening tools (such as EPA’s geospatial climate and environmental justice platform EJScreen), to find creative, productive and protective solutions for project approval and implementation.
1. SeeExecutive Order 13985: Advancing Racial Equity through the Federal Government (Jan. 20-21, 2021); Executive Order 14008: Tackling Climate Crisis at Home (Jan. 27 2021).
2. SeeBudget of the U.S. Government Fiscal Year 2023 at 105–106, available at https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf.
3. The federal agency, the Surface Transportation Board, is independent and is responsible for economic regulation of all modes of surface transport, including freight rail.
4. Jocelyn Timperley, Eight charts show how ‘aggressive’ railway expansion could cut emissions,” CARBONBRIEF (Jan. 30, 2019), https://www.carbonbrief.org/eight-charts-show-how-aggressive-railway-expansion-could-cut-emissions.
5. Seven Cnty. Infrastructure Coal. — Rail Constr. & Operation Exemption — in Utah, Carbon, Duchesne, & Uintah Cntys.Utah, FD 36284, slip Op. at 10 (Jan. 5th, 2021).
6. Seven Cnty. Infrastructure Coal. — Rail Constr. & Operation Exemption — in Utah, Carbon, Duchesne, & Uintah Cntys., Utah, FD 36284 (Dec. 15, 2021).
7. Center for Biological Diversity, et al v. STB, et al, U.S. Circuit Court of Appeals, D.C. Circuit, No. 22-1020.
8. Seven Cnty. Infrastructure Coal. —Rail Constr. Rail Constr. —Utah, Carbon, Duchesne, & Uintah Cntys, Utah, FD 36284 (Dec. 15, 2021).
9. See Center for Biological Diversity, et al v. STB, et al, U.S. Circuit Court of Appeals, D.C. Circuit, No. Circuit, No. [1939550] (Mar. 17, 2022).