Special Topics in Environmental Management

EPA Gets Sued After Stay of Methane Rule for O&G

Declaring that theirs is the first legal challenge to an action taken by the Trump EPA to roll back a federal effort to combat climate change, five environmental groups have petitioned the U.S. Court of Appeals for the D.C. Circuit to vacate the Agency’s stay of the Obama EPA’s final rule governing air pollutants from oil and gas (O&G) installations.

According to the groups, EPA Administrator Scott Pruitt lacks the statutory authority to impose a stay under Section 307(d)(7)(B) of the Clean Air Act. The crux of the case is whether the Agency is authorized to stay portions of the rule because, as specified in that section, it was impracticable for the public to raise objections to those portions during the proposed rule’s public comment period. The EPA claims it was impracticable to raise such objections, while the environmental groups claim that it was not. In fact, assert the groups, the issues being stayed actually were raised and extensively deliberated during the comment period.

Retroactive Stay

The 2016 rule established New Source Performance Standards (NSPS) for emissions of methane, a potent greenhouse gas, and volatile organic compounds and included requirements to control leaks (fugitive emissions) at well sites and compressor station sites, as well as emissions from pneumatic pumps. In addition, for a number of affected facilities, the rule requires that a professional engineer certify the closed vent system design and capacity, as well as any technical infeasibility determination relative to controlling pneumatic pumps at well sites.

Compliance with the 2016 rule was required by June 3, 2017, when O&G owners and operators had to complete their first round of leak monitoring and fix leaks found within 30 days of being detected. Two days later, the EPA published its notice of a retroactive 90-day stay and reconsideration in the Federal Register (FR).

The notice responded to the O&G industry, which asserted that several provisions of the rule were either not included or not adequately described in EPA’s proposed O&G NSPS and, therefore, were entitled to a Section 307(d)(7)(B) reconsideration proceeding. For example, the EPA had proposed to exempt low-production well sites from the fugitive emissions requirements, believing the lower production associated with these wells would generally result in lower fugitive emissions. However, the EPA now says the final rule differs significantly from what was proposed in that it requires these well sites to comply with the fugitive emissions requirements based on information and rationale not presented for public comment during the proposal stage.

Basis for Reconsideration

The environmental petitioners point out that the courts have established that reconsideration is not available when a party could have raised an issue during the comment period but failed to do so. Reconsideration is also unavailable when a party actually did raise the issue in comments or if the Agency’s final action is a logical outgrowth of issues that the EPA had timely noticed and public comments made on those issues. The groups assert that these are precisely the circumstances that in this instance remove the opportunity for reconsideration.

“Each of the objections cited by the Administrator as the basis for reconsideration could have been (and in fact, was) raised during the public comment period,” state the groups. “And each complained-about provision of the final rule was a logical outgrowth of the proposed rule and responsive to the comments actually made. There was no last-minute surprise or course change that commenters could not have anticipated. Consequently, there was no proper basis for reconsideration, nor for a stay.”

New Rule Can Be Requested

The groups add that industry petitioners are certainly entitled to ask the EPA to initiate a new rulemaking to amend the 2016 regulations. “But such proceedings are not ‘reconsideration,’” they add, “and in such proceedings the agency lacks authority to delay compliance with requirements of a rule (whether for 90 days or any other period) without notice, opportunity for comment, and a reasoned decision grounded in the statute and supported by a record.”

The groups’ petition to the D.C. Circuit is here.