Despite five decades of experience, there is a considerable gap in legal and empirical study on the impacts of the National Environmental Policy Act (NEPA). Proponents of reform often claim NEPA litigation is a major obstacle for federal actions; others have concluded litigation is not a major contributor of project cost escalation or delays. This Article studies the incidence and conditions of infrastructure project litigation under NEPA, using a data set of 355 major transportation and energy infrastructure projects that completed a federal environmental study between 2010 and 2018. We observe predevelopment litigation on 28% of the projects requiring an environmental impact statement, 89% of which involve a claim of a NEPA violation. The highest litigation rate is in solar energy projects, nearly two-thirds of which are litigated. Other high-litigation sectors include pipelines (50%), transmission lines (31%), and wind energy projects (38%). Energy sectors with greater private financing have shorter permit durations and higher rates of litigation and cancellation, but also higher completion rates relative to transport sectors, which have greater public financing and lower litigation rates but longer permit timelines.

This Article develops a new normative account of the function of financial assurance requirements (FARs) for end-of-life obligations in the energy sector. These obligations cover restoration of the site to its original condition or to a level that could accommodate another productive use once the energy project ends. FARs necessitate that operators evidence ability to pay for this. However, many FARs are failing across the United States, Canada, and the United Kingdom, posing serious implications for public funds and the environment and resulting in significant cost savings for operators that have the potential to distort trade. The authors argue that it is time to rethink FARs’ function, and that they ought to empower operators and regulators to discharge important legal responsibilities—or duties—ascribed to them prospectively. From the operator’s perspective, this is a duty to perform their end-of-life obligations. In contrast, the regulator’s duty is to protect the environment and human health by obtaining an appropriate guarantee from the operator that the works will be performed. The authors conclude that the empowering quality of FARs may be achieved most effectively through ensuring that fully funded capital reserves are “ring-fenced” from the claims of creditors prior to operations commencing.