Frivolous Environmental Lawsuits Hurt Both Economy and Environment

      I wrote in my 2021 book Sensible Decarbonization, that litigation often impedes mitigation, and gave several examples. Environmental activist groups are the groups that do nearly all of the suing. They have teams of lawyers on staff for the purpose of filing lawsuits. I believe that a small amount of these suits is justified but the vast majority are just a means to delay projects, often important energy projects, in order to inflict retribution on the companies and the industries, namely the fossil fuel companies and the fossil fuel industry. A delay is the next best thing to a ban. The companies themselves may be sued or the government may be sued. Companies often have to pay in the form of legal fees, delay costs, missed timelines, added requirements, changed routes, and altered permit conditions.  

     The recently proposed Manchin-Barrasso permit reform bill seeks to shorten permitting timelines and limit the ability of detractors to delay projects, both fossil fuel projects and clean energy projects. It could also decrease the costs of projects, decrease regulatory and investment uncertainty, and aid the energy transition by faster testing of more scaled-up projects. Obviously, delaying projects that reduce emissions simply delays emissions reduction. I also argued in my book that these environmental groups are essentially acting as a proxy for a regulatory agency, that through litigation they are in essence acting as a regulatory body. This is also known as regulation through litigation. It is becoming apparent to many (hopefully) that this setup is not sustainable, and potentially damaging to the economy and to our emissions reduction goals. Emily Domenech and Danielle Butcher Franz write in an opinion piece for The Hill:

 

“Fortunately, leaders in both political parties, clean energy advocates and reasonable environmentalists agree that we need robust permitting reform to address climate change on a reasonable timeline. The Manchin-Barrasso bill recognizes the need for limits to judicial review on development and energy projects because the current costs and delays are untenable for our country.”

 

They argue that most of this litigation is unnecessary and as the Breakthrough Institute report shows 80% of the lawsuits end up being unsuccessful (74% for energy projects). That statistic alone indicates that the current environmental litigation system is both unneeded, a waste, and a drain of resources. It also suggests that since a successful outcome is unlikely as the plaintiffs know, the cases can indeed be generally classified as frivolous. They argue that instead of pursuing litigation that is doomed to fail, these groups should stick to cases where they actually have a chance of winning due to real environmental concerns.

     The Breakthrough Institute report: Understanding NEPA Litigation: A Systematic Review of Recent NEPA-Related Appellate Court Cases, focuses on the National Environmental Policy Act (NEPA) which is a major vehicle allowing for lengthy litigation by opposers of development and energy projects. The Breakthrough authors explain the issue as follows:

 

“A procedural environmental regulatory “umbrella law,” NEPA creates significant and complex requirements for all major infrastructure projects and federal activities affecting the environment.”

 

“Broadly, NEPA requires that federal agencies conduct environmental reviews of proposed activities and their potential effects. For complex projects, agencies can either prepare an environmental impact statement (EIS) or an environmental assessment (EA). Alternatively, simpler projects can be afforded a categorical exclusion (CE) which fast-tracks the review process. After permits are granted through these review mechanisms, they may be challenged in the judicial system. The courts then have the authority to reaffirm, bolster, or otherwise improve the project plan to prevent or limit environmental damage. Of course, lawsuits to challenge EISs, EAs, and CEs necessarily extend project timelines. Particularly in the wake of the Infrastructure Investment and Jobs Act (2021), the Inflation Reduction Act (2022), and the CHIPS and Science Act (2022), federal policymakers and policy advocates have drawn increased attention to the regulatory burden and delay imposed by this judicial review.”

 

The goal of their report is to bring some data about cases to the litigation debate. They support the reform of the judicial review process under NEPA. In collaboration with legal experts at Holland & Knight they:

 

“… compiled and analyzed 387 NEPA cases brought to the U.S. appellate court system over the 2013-2022 period and categorized them by project type, environmental review, length of judicial review, federal agency, and plaintiff. Our results indicate that NEPA litigation overwhelmingly functions as a form of delay, as most cases take years before courts ultimately rule in favor of the defending federal agency.”

 

Since so many of the cases brought are lost (80%), they argue that the current “legal status quo prioritizes procedure over outcome.” They may ultimately lose 80% of cases brought but they also win by delaying those projects and costing the developers time and money, by working the system in favor of their secondary goal of delay. One of their findings is that the average length of time for these court challenges to come and go is 4.2 years (3.9 years for energy projects):

 

“On average, 4.2 years elapsed between publication of an environmental impact statement or environmental assessment and conclusion of the corresponding legal challenge at the appellate level. Of these appealed cases, 84% were closed less than six years after the contested permit was published, and 39% were closed in less than three.”

 

Some of their other findings include that 72% of cases were brought by NGOs and just 2.8% involve environmental justice issues. Most cases involved public lands management followed by energy projects. For energy projects, my main focus, here they concluded:

“Energy projects were the second most common subject of litigation (29%). Litigation delayed fossil fuel and clean energy project implementation by 3.9 years on average, despite the fact that agencies won 71% of those challenges. NGOs filed 74% of energy cases, with just 10 organizations responsible for 48% of challenges.”

They note that in 1981 the Council on Environmental Quality contended that environmental impact statements (EISs) would take less than 12 months. Now they take 4 years. Indeed, that is why the permit reform bill seeks to put time limits on these reviews and EISs. The lengthy EIS reviews rarely affect litigation outcomes. Thus, they argue, and perhaps this is the bottom line to the whole issue and why this reform of speeding up EIS reviews is needed:

“Our findings suggest that NEPA litigation at this level rarely changes environmental outcomes or protects environmental justice communities. Instead, judicial review of NEPA decisions largely serves as an advocacy tool for a small number of well-organized nonprofits to stall projects that do not align with their values.”

“Understanding that NEPA and the threat of litigation impose a sizable burden on agencies, this analysis shifts the question of burden away from scale and instead toward outcomes.”

The vast majority of cases were brought by major national NGOs. The Sierra Club and its affiliates were highest at 55 NGO suits filed and 14.2% of all NEPA cases. The Center of Biological Diversity (which I have argued is way more of an activist group than a science organization) was second, filing 30 suits and 7.8% of all NEPA cases.

     NEPA energy project challenges have had a slightly better success rate than overall NEPA challenges. The authors argue in the following quote that there is an underlying debate about measuring the societal benefits of projects. Indeed, that is often a factor in arguing cases. It is often argued in the case of pipelines that there is no established need for such a project. Of course, if a company believes there is a demand to supply at an agreeable price then that is economy. While pipelines may be seen as fossil fuel investments, they can also be decarbonization investments to bring natural gas to gas power plants that replace coal power plants and to bring natural gas to export facilities that process it into LNG and ship it overseas, often for the same purpose. New-build pipelines will soon be carrying more CO2 and hydrogen. Those are also needed decarbonization solutions. Since these organizations often argue against projects on the basis of GHG emissions, perhaps they should evaluate how much extra GHG emissions their successful challenges enable.

 

“Energy and infrastructure projects in particular are more likely to face cancellation if challenged under NEPA. While project cancellation is not the intent of the statute, litigation represents a creative and effective strategy to stop projects plaintiffs believe will do substantial harm. But these groups frequently contest projects that serve national policy objectives set by elected officials, calling the purpose and societal benefit of judicial review in its current form into question.”

     As the following table shows, fossil fuel projects are then most contested energy projects at 59.3%. Of that percentage, 37.2% are energy infrastructure projects and 22.1% are energy extraction projects. Clean energy projects make up nearly one-third at 32.7% of projects, with wind and nuclear leading the pack at 10.6% each. The second table shows Sierra Club leading the pack by a significant margin, especially in fossil fuel projects, although they oppose many clean energy projects as well. 

     Efficiency is synonymous with emissions reduction. Ensuring efficiency can also mean making the permitting process more efficient. Streamlining permitting and speeding up the process, as the Manchin-Barrasso bill intends to enable, will no doubt increase efficiency faster for both fossil fuel projects which are often more efficient than previous projects and clean energy projects. In both cases, emissions reduction is also speeded up in accordance with our decarbonization goals.

 

References:

Opinion: Environmentalists are suing us out of addressing climate change. Opinion by Emily Domenech and Danielle Butcher Franz. The Hill. August 11, 2024. Opinion: Environmentalists are suing us out of addressing climate change (msn.com)

Understanding NEPA Litigation: A Systematic Review of Recent NEPA-Related Appellate Court Cases. Nikki Chiappa, Ted Nordhaus, Alex Trembath, and Elizabeth McCarthy. The Breakthrough institute. July 11, 2024. Understanding NEPA Litigation | The Breakthrough Institute

Tort Reform. Wikipedia. Tort reform - Wikipedia