On May 12, the EPA finalized a set of regulations that will reduce methane, volatile organic compounds, and toxic air emissions in the oil and gas industry. The final rulewill target emissions from new or modified oil and gas wells. According to the Agency, the rule will prevent 11 million metric tons of carbon dioxide equivalent emissions in 2025. While the new standards will not apply to the vast numbers of existing rigs, well pads, and auxiliary equipment, the EPA indicated that it plans to regulate these sources as well by issuing an information request on the oil and gas industry regarding existing operations. The EPA states that the information received “will provide the foundation for developing regulations to reduce methane emissions from existing oil and gas sources.”
Yesterday, by a 5-4 vote, the U.S. Supreme Court issued a stay of the Obama Administration’s “Clean Power Plan,” regulations promulgated to limit CO2 emissions from the electric power sector. A coalition of 27 states is challenging the regulations in the U.S. Court of Appeals for the District of Columbia; this is the first time the Supreme Court has stayed a regulation before the Court of Appeals completed its review. The Supreme Court’s Order issuing the stay says it will remain in effect until the Court of Appeals has ruled on the coalition’s challenge, and if the coalition subsequently petitions the Supreme Court to consider the regulations, when the Supreme Court has either denied that petition or granted the petition and issued its own decision. As a result, the regulations likely will not become effective, if ever, before the President leaves office. As previously discussed on this blog, the Clean Power Plan is designed to reduce CO2emissions from fossil-fueled power plants by 32 percent from 2005 levels by 2030, and each state has individual emission goals.
On December 11, the U.S. Supreme Court granted certiorari to determine if a party can appeal a U.S. Army Corps of Engineers’ jurisdictional determination that a water feature is regulated under the Clean Water Act. United States Army Corps of Engineers v. Hawkes Co., Inc. et al., Docket No. 15-290. The Petition was filed by the Army Corps after the Eighth Circuit determined that a jurisdictional determination was final agency action and appealable. The Supreme Court’s decision will resolve a circuit split between the Eight and Fifth Circuits, and the issue is significant because prior to development landowners often obtain the Corps’ opinions as to whether a particular water feature is regulated under the Clean Water Act. If the Corps has jurisdiction, the landowner must obtain a permit (which takes considerable time and resources) or risk substantial enforcement penalties.
On December 15, 2015, the United States Court of Appeals for the District of Columbia Circuit issued an Order that will leave in place the United States Environmental Protection Agency’s (EPA) Mercury and Air Toxics Standards final rule while the agency works to issue final findings as ordered by the United States Supreme Court. In White Stallion Energy Center, LLC, et al. v. United States Environmental Protection Agency, et al., No. 12-1100 (Dec. 15, 2015), the D.C. Circuit directed that the proceedings be remanded to the EPA without vacatur of the MATS final rule. The D.C. Circuit also noted that EPA has represented that it is on track to issue a final finding by April 15, 2016.
The MATS rule has a very lengthy and controversial history. On February 16, 2012, the EPA issued national emission standards for hazardous air pollutants (NESHAP) for coal and oil-fired electric generating units (EGUs), known as the Mercury and Air Toxics Standards (MATS). The MATS rule finalized standards to reduce emissions of toxic air pollutants including mercury, arsenic and heavy metals. EPA proposed to regulate these emissions under Section 112 of the Clean Air Act (CAA). Industry, states and Continue reading D.C. Circuit Court Issues Order Remanding MATS Rule to EPA Without Vacatur→
Steve Berger, Lesly Davis and Doug McSwain, members of the Firm’s Corporate & Securities, Natural Resources & Environmental and Litigation & Dispute Resolution Service Teams, respectively, presented at the first annual Kentucky League of Cities & Kentucky American Water “Water Infrastructure Summit” in Lexington, Kentucky on October 14. Mr. Berger presented on the topic “Water Infrastructure Financing: WIFIA and P3,” and Ms. Davis and Mr. McSwain spoke on the topic “Legal Issues Related to Water Infrastructure” to a group of approximately 75 participants.
Today a three-judge panel of the United States Court of Appeals for the Sixth Circuit stayed enforcement of the new Clean Water Rules (the “Rules’” governing activities involving the “Waters of the United States” pending resolution of several challenges to the Rules). Unlike the prior injunction from the North Dakota District Court, the Sixth Circuit prohibited the Army Corps of Engineers and the EPA from enforcing the Rules anywhere in the United States. The prior rules will remain in effect while enforcement of the new Rules is stayed.
It is likely that the Corps and EPA will seek a hearing before all of the judges of the Sixth Circuit and/or appeal the injunction to the U.S. Supreme Court. The opinion can be found here.
On October 1, the EPA lowered the National Ambient Air Quality Standards (NAAQS) for ground-level ozone to 70 parts per billion (ppb), from the current level of 75 ppb set under President Bush in 2008. Ground-level ozone is a main component of smog and can produce a number of harmful effects on the respiratory system, including difficulty breathing and inflammation of the airways. In its rulemaking, the EPA estimates the public health benefits produced by lowering the standard will be $2.9 to $5.9 billion annually in 2025 and that they will include the prevention of 320,000 childhood asthma attacks a year. The EPA estimates that the lower standard will cause Industry to incur costs of $1.4 billion a year. Depending on the severity of the ozone problem, nonattainment areas will have from Continue reading EPA Reduces Ground-Level Ozone Standard to 70 ppb→
Late Thursday, a federal judge in North Dakota blocked the EPA’s Clean Water Rule, set to go into effect today, that would expand federal jurisdiction under the Clean Water Act. U.S. District Judge Ralph Erikson of North Dakota issued a preliminary injunction finding that the 13 states suing to block the rule are likely to succeed on their claim because “(1) it appears likely that the EPA has violated its Congressional grant of authority in its promulgation of the Rule, and (2) it appears likely the EPA failed to comply with the Administrative Procedure Act requirements when promulgating the Rule.” Judge Erikson found that the states have demonstrated irreparable harm because the “States will lose their sovereignty Continue reading Federal Judge Blocks Clean Water Rule in 13 States→
On Tuesday, the Environmental Protection Agency (“EPA”) proposed regulations to reduce emissions of greenhouse gases and volatile organic compounds from the oil and natural gas industry. The regulations are part of the Obama Administration’s plan to cut methane emissions from the oil and gas sector by 40 to 45 percent over the next ten years from 2012 levels. Methane is the main component of natural gas and, according to the Agency, a potent greenhouse gas with a global warming potential more than 25 times greater than that of carbon dioxide. The regulations will reduce methane emissions by 20 to 30 percent from 2012 levels by 2025. The source of the remaining reduction needed to reach the overall goal of 40 to 45 percent is unclear.
The regulations will apply to new and modified natural gas and oil wells only, not existing wells. The rules will require producers to: (1) find and repair leaks at wells, (2) capture gas from hydraulically fractured wells, (3) limit emissions from new and modified pneumatic pumps, and (4) limit emissions from compressors, pneumatic controllers, and other types of equipment used at natural gas transmission stations.