On July 3, the D.C. Circuit Court of Appeals vacated the U.S. Environmental Protection Agency’s (EPA) stay of the Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources under the Clean Air Act, Section 111(b)(1)(A) issued by EPA on June 3, 2016, 81 Fed. Reg. 35824. Clean Air Council v. Pruitt, No. 17-1145 (D.C. Cir.  July 3, 2017). The EPA had issued a public notice indicating it was rescinding the rule on June 5, 2017. 82 Fed. Reg.  25730.  This rule would address greenhouse gas emissions, including methane, from crude oil and natural gas production, transmission and distribution for projects after August 23, 2011.

EPA argued that it had inherent authority to issue a brief stay of final rules. The Court disagreed, holding that under CAA section 307(d)(7)(B), a stay is lawful only if reconsideration is ‘mandatory.’ Section 307(d)(7)(B) allows EPA to stay a rule where it was impracticable to raise such objection within the comment period, or if the grounds for such objection arose after the period for public comment. The court found commenters had the opportunity to address all issues raised in the appeal, and therefore stay was not mandatory. The Court vacated the stay as an arbitrary, capricious, and an abuse of discretion. As a result, EPA’s June 2016 GHG rules for crude oil and natural gas production, transmission and distribution as of the original effective date, August 2, 2016.

For more information on this topic, contact your Environmental counsel at Smith, Gambrell & Russell, LLP.