Regulation Database – Oil and Gas Sector

New Source Performance Standard for Oil and Gas Sector

On June 3, 2016, EPA published a final rule setting NSPS for greenhouse gases (namely methane) and volatile organic compounds, applicable to new, modified, and reconstructed facilities in the oil and gas sector. Affected facilities include well sites, gathering and boosting stations, processing plants, and compressor stations.

Litigation: The methane emission standards were challenged in North Dakota v. EPA, No. 16-1242 (D.C. Cir. 2016). State and industry petitioners argued that the rule exceeded EPA’s statutory authority, was unconstitutional, and was arbitrary, capricious, an abuse of discretion, and not in accordance with law. On January 4, 2017 the case was consolidated with American Petroleum Institute v. EPA, No. 13-1108 (D.C. Cir. 2013) and Independent Petroleum Association of America, et al. v. EPA, No. 15-1040 (D.C. Cir. 2015). On January 24, 2017 state and industry petitioners filed a motion asking the D.C. Circuit Court of Appeals to delay the briefing schedule to “allow time for new administration personnel to be briefed on the rules, issues, and history of this litigation, and it would allow them to provide meaningful input on the parties’ discussions regarding the briefing schedule and format.”
Deregulatory Action: On March 28, 2017, President Trump issued an executive order instructing EPA to review the oil and gas rule and to rescind or rewrite the rule as needed to promote the President’s goals of energy independence and economic growth. EPA immediately submitted a motion to the D.C. Circuit Court of Appeals to hold the case in abeyance pending EPA’s reconsideration of the rule. The court granted EPA’s request on May 18, 2017.

On April 4, 2017, EPA published a notice in the Federal Register announcing that it is reviewing and, if appropriate, will initiate proceedings to suspend, revise or rescind the rule.

On April 18, 2017, EPA sent a letter to fossil fuel companies stating that it intended to reconsider the fugitive emission standards in the NSPS (the companies  had petitioned EPA for reconsider of those standards). On June 5, 2017, EPA issued a federal register notice stating that it is granting reconsideration of additional requirements in the NSPS, specifically the well site pneumatic pumps standards and the requirements for certification by professional engineer. In addition, the EPA is staying for three months these rule requirements pending reconsideration. On June 16, 2017, EPA proposed a two-year stay of the NSPS requirements pending its reconsideration of those requirements.

On July 3, 2017, the U.S. Court of Appeals for the District of Columbia Circuit vacated the initial three month stay of the rules, holding that the EPA lacked authority under the Clean Air Act to issue the stay. The court issued a mandate, requiring EPA to begin implementing the rules. The mandate was delayed for 14 days on July 13, 2017, “to give EPA time to determine whether to seek panel rehearing, rehearing en banc, or pursue other relief.”