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Even though a court struck down the U.S. Environmental Protection Agency’s attempted 90-day pause on oil and gas industry methane regulations, the EPA may still be able to carry out plans for a longer regulatory suspension.
The 90-day stay, which went into effect June 2 but was vacated July 3, was not the only suspension in the works for the EPA rule designed to limit methane from new and modified oil and gas sources. The agency on June 16 proposed a two-year stay on the regulation’s requirements on fugitive emissions, pneumatic pumps and professional engineer certification.
For the longer stay, the agency is taking 30 days of comment from the public on the hold. Importantly, that process uses different statutory authority with different legal standards than the ones at play for the shorter, recently reversed stay, according to Whit Swift, a partner with Bracewell LLP.
“I don’t think that [this ruling] is fatal to the longer stay that is presumably just citing the broader authority of the EPA administrator to promulgate rules as deemed necessary,” Swift said in a July 5 interview. “If you think of that as the authority for this longer stay, the court doesn’t determine the fate of the longer stay. But it does create … the confusing situation they were trying to avoid. … Now you’ve got these elements of the methane rule springing back into effect until EPA, assuming it moves forward, does stay the rule following notice and comment.”
For the 90-day stay attempt, EPA Administrator Scott Pruitt moved to put a hold on parts of the agency’s rule limiting methane emissions, saying stakeholders had not had enough time to discuss certain aspects of the final 2016 regulation. The rule’s supporters fired back soon after, countering that those issues were already “extensively deliberated” during the regulation’s comment period. Two out of three judges at the U.S. Court of Appeals for the District of Columbia Circuit on July 3 ruled against the EPA, blocking it from putting the rule on hold for three months while the agency reconsiders its contents.
The EPA had hoped to be able to hold off on enforcing the methane rule until it has a chance to complete the two-year stay process, possibly as soon as September, to avoid an on-again, off-again enforcement situation, Swift said. The agency could try to use its discretion in enforcing the rule for the time being, but with the regulation officially on the books and ready for implementation, the agency cannot prevent states from requiring compliance, he said.
Sparingly enforcing the rule could also trigger court action, Meredith Graham, an attorney with law firm Babst Calland Clements and Zomnir PC, said in a July 5 interview. “As a practical matter, EPA could perhaps exercise enforcement discretion and not pursue enforcement of the provisions that were stayed, [but there is] the ongoing risk of citizen suits and public interest group action,” Graham said.
While the July 3 decision has no direct implications for the legal future of the two-year stay, regulators and other stakeholders may be able to take away a more “symbolic” meaning from the court’s order, Andrew Shaw, a senior managing associate with the global law firm Dentons, said in a July 5 interview. “There’s a … symbolic importance of this court’s decision, not so much in that the decision will have a tangible impact on other cases, but it is a signal that courts are going to look at the administration’s efforts to undo Obama-era environmental rules closely and that [regulators] are going to have to meet certain administrative and statutory requirements in order to accomplish their goal of repealing a lot of these rules,” said Shaw, who is part of Dentons’ public policy and regulation practice.
He continued, “It demonstrates that courts are going to examine agency actions — whether it be EPA, [the Bureau of Land Management] or other agencies — to ensure they are consistent with the underlying statutes and the Administrative Procedure Act. And going forward, these agencies, if they do work to repeal existing rules, they’re going to have to provide a reason, a justification, and that justification is likely to be challenged in court.”
Environmental groups, including the Environmental Defense Fund, the Sierra Club and the Environmental Integrity Project, celebrated the circuit court’s verdict but also acknowledged the EPA’s plans for a longer pause.
“[T]he threats to these common sense clean air protections are far from over, and EDF will keep fighting to make sure our nation’s bedrock clean air laws are enforced to safeguard all Americans,” Vickie Patton, the Environmental Defense Fund’s general counsel, said in a July 3 statement. The Sierra Club encouraged the public to weigh in on “the importance of implementing the rule.”
The Washington, D.C.-based research group ClearView Energy Partners LLC said that if the proposed two-year stay is finalized, the policy will likely be challenged in court, with a continued focus on what the EPA did and did not include in its administrative record when finalizing the rule, along with the technical specifics of complying with the new source performance standards.
The EPA’s methane rule was finalized in May 2016 and was the first-ever rule targeting methane emissions from the oil and gas sector. At the time, the agency estimated that the regulation would reduce 510,000 tons of methane emissions in 2025, which would have the same impact as curbing 11 million tonnes of carbon dioxide emissions.
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