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A Shallow Opinion: The Supreme Court Missed an Opportunity to Provide Guidance on Interstate Water Compacts in Texas v. New Mexico

Climate change is making water a scarcer resource. Warming temperatures, urban growth, and agricultural demand are pushing water resources to their limits. Increasingly, rival states compete over water allocation from limited sources throughout the country, such as the Rio Grande. These fights often extend to the courtroom. Since drafting the Rio Grande Compact in 1939, Texas, New Mexico, and Colorado have been engaged in a series of legal battles over the allocation of water in the Rio Grande. In 2013, Texas filed a suit in the U.S. Supreme Court, which has original jurisdiction in interstate disputes, to review the allocation of water in the Rio Grande. In 2018, the Court granted the United States permission to intervene to protect its distinct federal interest, namely its water treaty with Mexico. In Texas v. New Mexico, the Supreme Court held that the United States may intervene in interstate disputes because the following four specific conditions are met. First, the United States may intervene when the dispute “inextricably” involves the United States’ contract obligations to states. Second, the United States must have an integral role with the contract at issue. Third, when intervening, the United States must honor international treaty obligations. Fourth, the United States must not seek to initiate or expand issues in litigation. While the federal government lacks blanket authority to intervene in cases involving interstate compacts, the Court granted an intervention because of the distinct federal interests in this case. The holding in Texas v. New Mexico raises important questions regarding the future of federal government intervention. May the United States intervene to expand existing interstate litigation? May the United States initiate disputes between states? With climate change increasing the number of interstate water disputes, it is likely that the federal government’s obligations to states and Mexico will become more complicated, leading to additional requests to intervene and expand litigation between states in the future. The narrow holding in Texas v. New Mexico raises these important questions about the United States’ opportunities for litigation, which will likely become more common in the future. The answers to these questions may challenge the United States’ authority to enforce its obligations under the water treaty with Mexico and the Downstream Contracts. In a narrowly written opinion, Texas v. New Mexico correctly held that the United States may intervene in interstate water disputes for distinct federal interests. Nevertheless, Texas v. New Mexico failed to set guiding precedent for many contentious legal questions that will likely become more urgent due to climate change.

Feb 16, 2021
Ashley Donovan

Requiring Robust NEPA Analysis for Fossil Fuel Projects: A Promising Trend in the Tenth Circuit

Since President Trump took office in 2017, the Bureau of Land Management and other executive agencies have pursued expansive and aggressive development of fossil fuel resources on public lands. This development will add to the United States’ already large contribution to climate change. Unfortunately, those seeking to convince the U.S. government to mitigate the nation’s contribution to climate change have faced barriers through all branches of government. Congress has failed to pass comprehensive legislation to address climate change, and most of the progress made through the executive branch has been undone by President Trump. That leaves the courts—but how promising of an avenue is the judicial branch for those seeking to mitigate climate change? While federal courts have historically declined to provide broad relief in cases related to climate change, a promising trend has emerged in the Tenth Circuit. The Tenth Circuit Court of Appeals and several district courts within the Tenth Circuit are holding the Bureau of Land Management and other executive agencies accountable for failing to comply with the National Environmental Policy Act when enabling fossil fuel development. Although the relief these courts can provide is limited to the challenged agency decisions before them and by the procedural nature of the statute, this line of cases has potential to limit the executive branch’s aggressive pursuit of fossil fuel development and thus slow the United States’ contribution to climate change. This Note presents a case study of the trend in the Tenth Circuit and argues that it cannot be explained by precedent or judicial ideology. Rather, the five key factors explaining the trend are rooted in the National Environmental Policy Act’s fundamental purposes and requirements. After introducing the primary cases within this trend and outlining its key factors, this Note provides reasons for caution and suggests litigation strategies for those seeking to capitalize on the trend to limit further contributions to climate change.

Feb 16, 2021
Naomi Wheeler

Taking Credit: How Congress Is Reshaping Renewable Energy Investment Incentives

This In Brief begins with a short discussion of two major legislative acts to change tax law: the 2017 TCJA and the 2018 BBA. It then discusses the production tax credit (PTC) and the investment tax credit (ITC), the two energy tax provisions that the BBA changed and eliminated, respectively. Finally, it discusses the creation of the base erosion anti-abuse tax (BEAT) and the elimination of the corporate alternative minimum tax (AMT): two sweeping changes in the TJCA that complicate the incentive structure for corporations to claim energy tax credits. Ultimately, it concludes that this new incentive structure undermines historic policy goals for energy tax legislation despite the loopholes available for creative investing.

Feb 16, 2021
Delia Scoville

FERC Ignores D.C. Circuit to Overlook Climate Impacts of Gas Projects

The United States’ energy sector is the country’s “principal . . . contribution to climate change.” The Federal Energy Regulatory Commission (FERC) “regulates significant swaths of the U.S. energy industry, including the wholesale sale and transmission of electricity,” the permitting of several types of energy infrastructure projects, and the transportation of oil and natural gas, imbuing the Commission’s decisions with serious climate impacts. The Commission approving natural gas pipelines in the face of climate change is an “increasingly high-profile issue” and “has been the subject of significant litigation in recent years.” Two recent D.C. Circuit decisions, Sierra Club and Birckhead, clarified how FERC must consider the climate impacts of infrastructure projects under the National Environmental Policy Act of 1969 (NEPA). In Sierra Club, the court held that a natural gas pipeline’s downstream greenhouse gas (GHG) emissions were reasonably foreseeable indirect environmental effects when FERC knew that the gas was going to be combusted in specific powerplants. This decision can be interpreted extremely narrowly to stand for the proposition that downstream GHG emissions are foreseeable only when FERC knows the exact destination and end-use of natural gas. In Birckhead, the court explicitly rejected a narrow interpretation of Sierra Club. The case involved whether upstream and downstream GHG emissions were indirect effects of installing a natural gas compression facility, infrastructure that compresses gas so that more can be transported in a pipeline. While the court ultimately held that it lacked jurisdiction to rule on this issue, it stated in dicta that projects’ indirect GHG effects are not just foreseeable when the gas’s destination and end-use are precisely known, thereby rejecting FERC’s “extreme” interpretation of Sierra Club. Instead, it provided that these decisions should be made on a case-by-case basis. Despite the dicta in Birckhead, many recent FERC decisions only recognized GHG emissions to be indirect effects of natural gas projects when the destination and end-use of gas was precisely known. FERC Commissioner Glick opined in numerous dissents that by not fully considering the indirect climate effects of natural gas projects, FERC is snubbing the D.C. Circuit’s interpretation and violating NEPA. Birckhead’s dicta portends a future D.C. Circuit decision finding FERC in violation of NEPA and providing more stringent guidelines on how FERC must consider the climate impacts of projects under its purview.

Feb 16, 2021
Braden Leach