EPA rule tees up legal battle over federal climate authority

By Niina H. Farah, Lesley Clark | 03/11/2024 06:19 AM EDT

The methane rule for the oil and gas sector could face “major questions” claims, which one environmental lawyer said could “curry favor with some judges.”

A flare burns natural gas at an oil well.

A flare burning natural gas at a well in Watford City, North Dakota. Matthew Brown/AP

EPA’s rule to limit methane emissions from the oil and gas sector may be the latest battleground over whether the agency is exceeding its authority to regulate planet-warming emissions.

The rule is part of a suite of regulatory actions by the Biden administration to address climate change. Methane is a particularly useful target for quickly stemming the rise of global temperatures because the potent greenhouse gas has about 80 times the heat-trapping capability of carbon dioxide over a 20-year period.

EPA published the rule Friday in the Federal Register. Lawsuits are already rolling in.


Environmental lawyers said they wouldn’t be surprised to see EPA’s critics invoke the “major questions” doctrine to challenge the rule. The theory, which says agencies must have express permission from Congress to handle politically and economically significant issues, gained new prominence after the Supreme Court used it in 2022 to invalidate an Obama-era EPA rule on power plant emissions.

“It comes up in almost every case now,” said Michael Burger, executive director at the Sabin Center for Climate Change Law at Columbia University. “It doesn’t seem like there’s a particularly strong argument for it, but that’s not to say it won’t curry favor with some judges.”

On Friday, Texas Attorney General Ken Paxton (R) launched the first attack against the rule in the U.S. Court of Appeals for the District of Columbia Circuit.

Other groups are mulling similar action.

The Western Energy Alliance is part of a trade group coalition preparing to file a petition for the agency to reconsider its rule, said Kathleen Sgamma, president of the alliance. The coalition “will likely sue as well,” she said.

EPA’s long-awaited rule requires fossil fuel companies — for the first time — to use equipment upgrades and leak detection to tackle the vast majority of the sector’s methane emissions from existing sources, along with setting tighter emissions standards for new oil and gas infrastructure.

The agency has received backing from parts of the industry for its power to regulate methane along with volatile organic compounds. Supporters of the rule noted that EPA’s approach of focusing on technological fixes is well within the agency’s authority.

Congress has been clear about EPA’s obligation to address methane emissions from the oil and gas sector, said Rosalie Winn, a senior attorney at the Environmental Defense Fund.

“EPA’s final methane protections for the oil and gas sector are firmly rooted in the extensive factual record before the agency and EPA’s core authority to address harmful pollution under Section 111 of the Clean Act,” she wrote.

Congress passed a Congressional Review Act resolution in 2022 that blocked the Trump administration’s decision to nix Obama-era methane standards for the oil and gas industry, and lawmakers codified a methane reduction program to incentivize further methane cuts in the Inflation Reduction Act, she said.

“EPA’s final methane standards fulfill the agency’s obligation under the Clean Air Act and are the culmination of a rigorous public process that reflected the input and support of a wide variety of stakeholders,” Winn said, “including leading oil and gas operators.”

Legal targets

Opponents of EPA’s methane rule are gearing up to challenge it months after the agency first made the details of its regulation public.

EPA announced the final rule — which will slash 16 million metric tons of methane each year — during United Nations climate talks in Dubai, United Arab Emirates, in December. It wasn’t until Friday that opponents could file litigation because of an unusually long delay publishing it in the Federal Register.

Corinne Snow, counsel at Vinson & Elkins and former chief of staff at the Department of Justice’s environment division during the Trump administration, said a third-party reporting provision in the rule could trigger lawsuits. The rule establishes a new “super-emitter” program that authorizes outside groups to become certified by EPA to monitor for the biggest polluters using technology like satellites.

Once a “super-emitter” event is identified, the third party notifies the agency, which verifies the report and informs the owner or operator. They are then required to investigate and report back to EPA. The agency will then publish the notifications on its website.

Snow said there are certification requirements for outside monitors, but “anytime when it’s a third party and not EPA, people might have questions about how that actually works.”

The Western Energy Alliance is among the groups that have been critical of that part of the program. Sgamma blasted the program last year for having “little accountability or quality control.”

“With no authority from Congress, EPA has created a program that cavalierly hands compliance and enforcement authority to entities with no authority under the Clean Air Act,” she said in a December statement. “These entities will not be properly vetted or held accountable for incorrect data or harassment of companies. This program is ripe for challenge in court.”

Overall, Sgamma called EPA’s methane rule punitive to an industry that has been decreasing its methane emissions even as oil and gas production has increased in the past two decades.

Sgamma said that the rule’s requirements would force the closure of hundreds of thousands of low-producing wells that are mainly operated by small businesses. These closures could jeopardize 10 percent of U.S. oil production, she said.

The Texas attorney general did not detail claims against EPA’s methane rule in his initial D.C. Circuit lawsuit on behalf of the Texas Railroad Commission. Paxton’s office did not immediately respond to a request for comment on the suit.

But in earlier public comments, the state oil and gas regulator and the Texas Commission on Environmental Quality raised concerns about how requirements for crafting state plans would be too costly and time-consuming, particularly in a state with a large number of oil and gas facilities.

Texas officials warned EPA against crafting an overreaching rule like the agency’s 2015 Clean Power Plan, the regulation the Supreme Court struck down in 2022 using the major questions doctrine.

The Clean Air Act “is intended to address and mitigate a real and significant threat to human health and the environment through regulation of domestic emissions,” they wrote. “Agencies have only the authority granted to them by Congress and no such grant to address global climate change or transform international energy supply exists.”

EPA is also likely to face procedural questions on how it crafted its methane rule.

“It’s a complex sector and a complex rulemaking,” said Carrie Jenks, executive director of Harvard University’s Environmental & Energy Law Program. “There will be arguments about the timing and the specifics and the cost assumptions.”

Industry support

EPA’s rule also follows industry efforts to curb methane emissions, even without federal requirements. Oil majors like Exxon Mobil, Shell and BP have expressed support for EPA to regulate methane emissions from the sector.

Jeff Eshelman, president and CEO of the Independent Petroleum Association of America (IPAA), said in a statement that the group supports “cost-effective management of methane and volatile organic compound emissions.”

“Unfortunately, despite years of trying to educate the EPA regarding the significant differences within the oil and natural gas production industry, these new source regulations will impose complicated new requirements that could be structured more cost effectively,” Eshelman added.

Meanwhile, he said, EPA’s requirements for existing sources would lead to the shutdown of 300,000 of about 750,000 total low-production wells.

“IPAA regrets that the EPA has chosen this path and will continue to work with branches of the federal government and with states to try to revise these regulations and make them cost effective,” Eshelman said.

The American Petroleum Institute also noted its shared goal of reducing methane emissions and lauded EPA for modifying certain provisions of the rule, including adjusting compliance timelines.

Still, API “remains concerned over aspects that could limit progress on reducting methane emissions and stifle innovation,” said Dustin Meyer, the group’s senior vice president of policy, economics and regulatory affairs, in a statement.

Meyer said API would continue work with EPA to “enhance” the rule to allow for accelerated emissions reductions, while still meeting increasing energy demand.

Burger of Columbia said the EPA methane rule is important for protecting public health and saving money.

“The ability to address methane gives us a little more time to deal with the problems of global warming,” he said. “If we can make dramatic, short-term reductions to reduce short-term warming effects, [it] gives us a little bit more buffer than we otherwise would have, which undoubtedly will be critical for saving lives.”

This story also appears in Climatewire.