## Facts

- Pacific Gas & Electric Co. applied to the Nuclear Regulatory Commission (NRC) for a license to construct and operate an Independent Spent Fuel Storage Installation (ISFSI) at the Diablo Canyon nuclear power plant in San Luis Obispo County, California.
- The ISFSI would store spent nuclear fuel in on-site dry casks under the NRC’s Part 72 licensing regime.
- The NRC prepared an Environmental Assessment (EA) and issued a Finding of No Significant Impact (FONSI), rather than preparing an Environmental Impact Statement (EIS).
- After September 11, 2001, San Luis Obispo Mothers for Peace and allied groups argued the NRC’s NEPA review was deficient because it did not analyze the environmental consequences of a deliberate terrorist attack on the proposed ISFSI.
- The NRC rejected that contention, concluding the possibility of a terrorist attack was too “remote and speculative” to require analysis in its NEPA review.
- Petitioners sought direct appellate review of the NRC’s licensing approval.

## Issues

1. Whether NEPA requires the NRC to consider the environmental consequences of a potential terrorist attack on a proposed spent-fuel storage facility during environmental review.
2. Whether the NRC’s determination that terrorist-attack risks are categorically “remote and speculative,” and therefore excluded from NEPA analysis, was arbitrary and capricious under the APA.
3. Whether other asserted deficiencies in the NRC’s environmental review and licensing decision warranted relief.

## Decision

- The Ninth Circuit granted the petition in part and denied it in part.
- The court held NEPA required the NRC to consider the environmental consequences of a potential terrorist attack on the ISFSI under NEPA’s rule of reason when the impact is reasonably foreseeable.
- The court held the NRC’s blanket conclusion that the risk was “remote and speculative” was arbitrary and capricious because it lacked a reasoned, record-based explanation.
- The court remanded to the NRC for further NEPA analysis addressing the environmental consequences of a terrorist attack.
- The court otherwise upheld the NRC’s licensing decision and rejected most other challenges.

## Legal Principles

- NEPA requires an agency to take a “hard look” at reasonably foreseeable environmental consequences; the scope of analysis is governed by a rule of reason rather than an obligation to address every conceivable scenario.
- Intentional acts, including terrorism, may require NEPA analysis when the potential environmental consequences are not so speculative as to fall outside reasonable foreseeability.
- An agency’s categorical refusal to analyze an asserted impact must be supported by a rational, record-based explanation; conclusory statements that a risk is “remote and speculative” can be arbitrary and capricious under the APA.
- Requiring disclosure and analysis of environmental effects under NEPA does not itself mandate particular security measures or dictate national security policy choices.

## Conclusion

The Ninth Circuit required the NRC to supplement its NEPA review to address the foreseeable environmental consequences of a terrorist attack on the Diablo Canyon spent-fuel storage facility, holding the NRC’s unsupported “remote and speculative” exclusion arbitrary and capricious, while leaving the remainder of the licensing approval intact.


San Luis Obispo Mothers for Peace v. Nuclear Regul. Comm’n, 449 F.3d 1016 (9th Cir. 2006)