Oil and Gas Lawyer Blog
The DC Court of Appeals and the US District Court for the Northern District of California have struck down orders of the EPA and the Bureau of Land Management postponing compliance dates for the Obama administration’s rules requiring the oil and gas industry to monitor and reduce methane emissions. Both courts held that the agency’s orders were “arbitrary and capricious” and in violation of the Administrative Procedure Act. Clean Air Council, et al. v. E. Scott Pruitt, Administrator, Environmental Protection Agency and Environmental Protection Agency, No. 17-1145, opinion July 3, 2017; State of California, et al. v. U.S. Bureau of Land Management, et al., Case Nos. 17-cv-03804-EDL, 17-cv-388-EDL, opinion Oct. 4, 2017.
Methane is a powerful greenhouse gas contributing to human-caused global warming. The EPA’s rules, aimed at reducing emissions of methane from oil and gas facilities, were adopted in May 2016. They impose “new source performance standards” for finding and fixing leaks of methane in oil and gas production facilities. Those rules require operators to implement a leak monitoring plan using optical gas imaging to find and fix leaks from valves, connectors, pressure-relief devices, flanges, compressors and thief hatches on storage tanks. The BLM issued similar rules in November 2016 to reduce waste of natural gas from venting, flaring and leaks during oil and gas production activities on Federal and Indian lands.
President Trump appointed Scott Pruitt as Administrator of EPA. Pruitt, as Attorney General of Oklahoma, sued the EPA at fourteen times on behalf of his state, attacking the EPA’s authority to regulate various industries. Pruitt rejects the scientific consensus that human activities contribute to climate change.
The EPA and BLM under the new Trump administration issued orders delaying for ninety days the implementation deadlines for companies to comply with the EPA and BLM methane rules. Environmental groups and others then sued contending that the agencies had no authority to delay the rules without going through the rule-making process required by the Administrative Procedure Act.
In the EPA case before the DC Circuit, the EPA argued that it had the right to delay implementation because the final rule addressed issues that were not within the scope of the initial proposed rule-making. The Court disagreed, holding that the portions of the rule the industry complained of were fully addressed in the rule-making proceedings prior to adoption of the rules.
In the BLM case, the BLM sought to postpone implementation of its rules because the legality of the rules are the subject of separate suits pending in the US District Court in Wyoming, Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al., Case No. 16-cv-00280-SWS (D. Wyo. filed Nov. 15, 2016), and State of Wyoming et al. v. U.S. Dep’t of the Interior et al., Case No. 16-cv-00285-SWS (D. Wyo, Filed Nov. 18, 2016). The court disagreed, holding that the BLM must go through the standard rule-making process to revoke or postpone its rules even if they are subject to legal challenge.
The EPA and the BLM have separately instituted new rule-making proceedings to reconsider the Obama administration rules.