Articles Posted in GHGs

In June, at the end of its 2021-2022 Term, the United States Supreme Court issued a ruling with far reaching implications for the ability of the Environmental Protection Agency (“EPA”) to regulate Greenhouse Gas (“GHG”) emissions and any attempt to limit the impacts of climate change. In a ruling by the conservative majority of the Court in West Virginia v. Environmental Protection Agency, the Court held that an EPA regulation attempting to regulate GHG emissions exceeded the authority of the EPA. The decision is unusual as the rule was never fully implemented. While the rule, known as the Clean Power Plan, adopted in 2015, was intended to implement what the EPA found was  the “best system of emission reduction” or ” the BSER, for the kind of existing source at issue”, the rule was stayed by the Court in 2016.

The rule was based on an analysis undertaken by the EPA.

“Having decided that the BSER was one that would reduce carbon pollution mostly by moving production to cleaner sources, EPA then set about determining ‘the degree of emission limitation achievable through the application’ of that system. … The Agency recognized that, in translating the BSER into an operational emissions limit, it could choose whether to require anything from a little generation shifting to a great deal. It settled on what it regarded as a ‘reasonable’ amount of shift, which it based on modeling how much more electricity both natural gas and renewable sources could supply without causing undue cost increases or reducing the overall power supply. … The Agency ultimately projected, for instance, that it would be feasible to have coal provide 27% of national electricity generation by 2030, down from 38% in 2014.”

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Last week the U.S. District Court for the District of Columbia ruled on oil and gas Lease 257 issued by the U.S. Government for 80.8 million acres of the Gulf of Mexico pursuant to the Bureau of Ocean Energy Management’s (“BOEM”) 2017–2022 Program. The ruling in Friends of the Earth v. Haaland, among other things addressed issues of climate change. If upheld, the determination may have far reaching impacts.

The action, against various federal officials alleged that the issuance of the Lease violated the National Environmental Protection Act (“NEPA”) and the Administrative Procedure Act (“APA”). The Court addressed four cross motions for summary judgment.

The Lease involves the portion of the Gulf of Mexico known as the Outer Continental Shelf. “The Outer Continental Shelf Leasing Act (“OCSLA”) is the statutory framework under which the Department of the Interior may lease areas of the Outer Continental Shelf. 43 U.S.C. 1334; Ctr. for Biological Diversity v. U.S. Dep’t of Interior,563 F.3d 466, 472 (D.C. Cir.2009) [hereinafter “Biological Diversity”]. OCSLA sets forth a four-stage process for potential oil and gas production that is “pyramidic in structure, proceeding from broad-based planning to an increasingly narrower focus as actual development grows more imminent.” State of Cal. ex rel. Brown v. Watt, 668 F.2d 1290,1297 (D.C. Cir. 1981).”

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The  Court of Appeals for the D.C. Circuit determined that, under the Clean Air Act, the EPA lacked authority to stay implementation of a new rule on Greenhouse Gas (GHG) Emissions. In Clean Air Council v. Pruitt, the Court  found that the stay was arbitrary, capricious and in excess of the authority of the EPA Administrator.

In June 2016, the then EPA administrator issued a rule regarding leaks of methane and other oil and gas pollutants. The rule required,  among other things, an “initial monitoring survey” be conducted by June 3, 2017. In April, 2017 the new EPA administrator, Scott Pruit, issued a letter indicating the EPA would reconsider the rule and intended to issue a 90 day stay of the rule, as permitted under the Clean Air Act (CAA).  The required notice of reconsideration was published on June 5, 2017, two days after the initial monitoring was to have been completed. The notice provided for the following reconsideration and 90 day stay:

“…reconsideration on four aspects of the methane rule: (1) the decision to regulate low-production wells, (2) the process for proving compliance by “’alternative means,’” (3) the requirement that a professional engineer certify proper design of vent systems, and (4) the decision to exempt pneumatic pumps from regulation only if a professional engineer certified that it was “’technically infeasible’” to route such pumps “’to a control device or a process.’” 82 Fed. Reg. at 25,731–32. In addition, the notice “’stay[ed] the effectiveness of the fugitive emissions requirements, the standards for pneumatic pumps at well sites, and the certification by a professional engineer requirements’” for 90 days “’pending reconsideration.’” 82 Fed. Reg. at 25,732. The notice explained that the stay had gone into effect on June 2, 2017—that is, three days before the notice was published in the Federal Register. 82 Fed. Reg. at 25,731.”

However, on June 16, 2017 another notice was issued advising of the intent to reconsider the entire 2016 rule and to extend the stay for two years. After the suspension, several environmental groups brought the action seeking alternatively a stay or  vacating the actions of the EPA Administrator, on the grounds that the: “…EPA’s stay violates CAA section 307(d)(7)(B) because “’all of the issues Administrator Pruitt identified could have been, and actually were, raised (and extensively deliberated) during the comment period.’”

The EPA and industry parties argued that the stay and reconsideration was not a final agency action and therefore the Court lacked jurisdiction to review it. The Court concluded it does have jurisdiction due  to the nature of the action.

“…EPA has not only concluded that section 307(d)(7)(B) requires reconsideration, but it has also suspended the rule’s compliance deadlines. EPA’s stay, in other words, is essentially an order delaying the rule’s effective date, and this court has held that such orders are tantamount to amending or revoking a rule.”

The Court noted that, as the initial monitoring was to be completed by June 3 and repairs of leaks performed within thirty days of June 3, with potential penalties of non-compliance, “[t] he stay—which EPA made retroactive to one day before the June 3 compliance deadline—eliminates that threat, see 82 Fed. Reg. at 25,731, and thus relieves regulated parties of liability they would otherwise face.”

The Court went on to say that the EPA’s argument that the Court could impose a stay upon a regulation being imposed but could not prevent the EPA’s stay of a regulation, would have a “perverse result”. It further noted that the CAA provides specific criteria be met in order to permit the stay of a final rule. The test is ” that it was “’impracticable to raise’” an objection during the public comment period and the objection is “’of central relevance to the outcome of the rule.’” Only when these two conditions are met does the statute authorize the Administrator to stay a lawfully promulgated final rule.”

In addressing the EPA’s lack of authority to issue the stay in this instance the Court held:

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