A federal court has once again blocked an attempt by the Trump administration to roll back methane regulations on Friday. If upheld, the decision will effectively reinstate stricter pollution controls aimed at reducing the flaring, venting and leaking of natural gas.
Given current regulations of the greenhouse gas in Wyoming largely align with federal requirements, the court’s ruling could have little effect on oil and gas operators working Wyoming, analysts said.
In a win for environmental advocates, the U.S. District Court for the Northern District of California vacated the Bureau of Land Management’s overhaul of the 2016 Waste Prevention Rule last week. Adopted during the Obama administration, the Waste Prevention Rule set out to limit the amount of methane and other pollutants emitted during natural gas production on public and tribal land.
But the Trump administration considered the meatier regulatory requirements burdensome and costly to the private sector and set out to reverse them upon assuming office. Following the president’s cue, the Bureau of Land Management announced last year it would rescind provisions of the rule to reduce regulatory burdens on energy companies. State regulators would lead the way on managing methane emission standards.
The Trump administration has made several attempts to halt the implementation of the Waste Prevention Rule since 2017. But a series of congressional and court challenges have prevented federal regulators from fully disavowing the rule. The Environmental Protection Agency has also proposed to remove methane requirements from their emissions regulations for new and modified oil and gas facilities, though the agency has yet to issue final rules.
But in a blow to the Trump administration and some energy operators, the court ruled Friday that the Bureau of Land Management — a branch of the Interior Department — had failed to properly repeal the rule, calling the associated rulemaking process “wholly inadequate.”
“In its haste, BLM ignored its statutory mandate under the Mineral Leasing Act, repeatedly failed to justify numerous reversals in policy positions previously taken, and failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations,” Judge Yvonne Gonzalez Rogers wrote in court documents Friday.
What it means for Wyoming
The court decision could ultimately have minimal affect on oil and gas operators in Wyoming.
As it turns out, Wyoming’s emission standards largely align with the federal Waste Prevention Rule already. In fact, the 2016 federal emissions rule mirrored standards first applied to the Upper Green River Basin near Pinedale. Wyoming’s Department of Environmental Quality takes the lead in monitoring the state’s air quality, making sure harmful pollutants like methane and volatile organic compounds around oil and gas operations stay within safe limits.
The state agency promulgated new emission rules at the tail end of 2018, while former Gov. Matt Mead was still in office. The new regulations reference the Obama-era Environmental Protection Agency emission standards on new and existing wells that the Trump administration has also hoped to slash.
However, the state has done little to fully adopt the Bureau of Land Management's 2016 Waste Prevention Rule, which would also apply methane emission limits and standards to existing wells on federal and public lands in Wyoming.
For that reason, "the court ruling could actually have a big impact in terms of methane reduction requirements applying to thousands of existing wells on federal lands across Wyoming," Jon Goldstein, director of regulatory and legislative affairs at the Environmental Defense Fund wrote in an email.
Back in 2016, Wyoming had also challenged the Obama administration’s attempts to beef up the Waste Prevention Rule, but that litigation remains on hold.The state of Wyoming was an intervenor-defendant in the recent court case and supported the Trump administration’s revisions to the Waste Prevention Rule. Several of the state’s lawmakers followed suit.
In response to Friday’s court ruling, the Petroleum Association of Wyoming cautioned that reinstating the Obama-era Waste Prevention Rule only duplicated Wyoming’s own environmental regulations, thereby stepping on state regulators and operators’ toes.
“The ruling out of the U.S. District Court in California is the result of a false narrative that sound environmental regulation must come from the federal level,” Ryan McConnaughey, the association’s communication director, said in a statement to the Star-Tribune. “Wyoming has some of the most restrictive air quality regulations in the country, which is why the Obama Administration primarily based its 2016 methane regulations on Wyoming’s efforts.”
“This decision will do nothing to benefit Wyoming’s air quality while thrusting duplicative regulations onto an industry already dealing with a historic drop in demand due to the pandemic,” he added.
Some Wyoming operators have voluntarily gone above and beyond state and federal emission requirements, he noted.
“We currently exceed regulatory requirements on leak detection and we’re utilizing drones and fixed monitoring and other tech,” said Paul Ulrich, vice president of government and regulatory affairs at Jonah Energy. This year, Jonah Energy, a leading natural gas producer operating in Wyoming’s Green River Basin, became the first company to receive the Independent Energy Standards Corporation’s low-methane standard award.
In fact, Jonah Energy did not support the rollback of methane emission regulations proposed by the Environmental Protection Agency last year.
“We felt the (existing) regulations were common sense and cost effective, and most importantly, helped to continue to reduce fugitive methane emissions across the nation,” Ulrich said.
“Clearly, our philosophy is the same (for the Waste Prevention Rule),” he added. “If the rules are common sense and cost effective and can continue to reduce fugitive methane emissions, then we are supportive of a reasonable regulatory structure to accomplish that.”
Win for climate, public health
But environmental groups, along with New Mexico and California, lauded the court’s ruling on Friday in favor of more stringent federal regulations for methane. Methane, a primary component in natural gas, is considered at least 84 times more potent in warming the climate than carbon dioxide over a 20-year period.
“The court’s decision is a win for science-based decision-making and the climate, at a time when the Trump administration is trying every way possible to give polluters a free pass,” said Alison Flint, senior legal director at the Wilderness Society.
The economic consequences of wasting natural gas are notable too. Lost gas translates into lost tax revenue for Wyoming, given operators are not required to pay royalties on gas flared. Flaring, or burning off extra gas, constitutes one accepted, though regulated, method of disposal. But facilities can also release methane and volatile organic compounds if leaks or equipment defects occur.
Over $2.6 billion have been lost in royalties nationwide since 2013 from wasted natural gas, according to an analysis by the Environmental Defense Fund.
“Since the first day they came into office, the Trump administration has sought and failed to undermine the Methane Waste Prevention Rule at every turn — in Congress, through the regulatory process, and in the courts,” said Rosalie Winn, a senior attorney with the Environmental Defense Fund. “Today’s ruling shows their efforts are illegal, and provides for the reinstatement of common sense protections that are in the best interest of the American public.”
The U.S. Department of Interior has two months to appeal the court’s decision to the 9th Circuit. Otherwise, the 2016 Waste Prevention Rule provisions will be reinstated in about three months.
"While industry lobbying groups will likely challenge the 2016 rule — and we’ll be back in Wyoming district court to defend the rule again — the decision to reinstate it represents a huge victory for common-sense management of a valuable public resource," Wyoming Outdoor Council Executive Director Lisa McGee wrote in a post. "Notably, during the legal limbo of the past four years, more and more oil and gas companies have voluntarily adopted the requirements of the rule — because they’re cost effective and good PR for an industry under scrutiny for its contributions to climate change."
Follow the latest on Wyoming’s energy industry at @camillereports
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