Congress Cancels Trump-era Methane Rule Amendments, Restoring Prior Standards

Akin Gump Strauss Hauer & Feld LLP

Yesterday evening, President Biden signed Congress’s resolution to use the Congressional Review Act (CRA) to reject a September 2020 U.S. Environmental Protection Agency (EPA) rule that rescinded methane emission standards for the oil and gas industry. The Trump-era rule, entitled “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review,” purportedly sought to remove “regulatory duplication” while maintaining environmental protections. Specifically, the Trump-era rule rescinded the New Source Performance Standards for volatile organic compound and methane emissions applicable to transmission and storage sources; rescinded methane-specific standards applicable to production and processing sources; and required EPA to issue a determination that an air pollutant causes or contributes significantly to “dangerous” air pollution as a prerequisite for setting new standards. Now effective, the resolution restores the Obama-era standards in place until September 2020.

The Obama-era standards represented the most significant federal regulations aimed directly at reducing methane emissions from the oil and gas industry, targeting gas wells, storage vessels, controllers, pumps, compressors and on-shore natural gas processing plants. In some cases, the standards imposed up to 95 or 100 percent emissions reduction requirements or controls, which the Agency estimated would result in hundreds of millions of dollars in costs for the industry through 2025.

The restored standards do not signal an end to Congressional Democrats’ and the Biden-Harris administration’s response to emissions from the oil and gas industry. While the CRA prevents agencies from promulgating a “new rule that is substantially the same,” the Biden-Harris administration’s recently released Unified Agenda of Federal Regulatory and Deregulatory Actions indicates that the EPA will propose new methane emissions guidelines for existing and new operations in the oil and gas industry, which according to President Biden’s public messaging will “requir[e] aggressive methane pollution limits.” Meanwhile, the administration is in the midst of reviewing the Interior Department’s fossil fuel leasing program, with notable changes to the existing federal regime virtually certain to follow. These represent just a few of many actions the administration has taken and will continue to take in an attempt to meet the United States’ commitment to reduce greenhouse gas emissions under the Paris Agreement.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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