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Court Nixes Obama Methane Rule for Oil, Gas on Public Lands (2)

Oct. 8, 2020, 9:49 PM; Updated: Oct. 8, 2020, 11:48 PM

The Bureau of Land Management’s Obama-era effort to cut methane emissions on public lands exceeded the agency’s authority, a federal court ruled Thursday.

The U.S. District Court for the District of Wyoming struck down the 2016 rule, saying the bureau “exceeded its statutory authority and acted arbitrarily in promulgating the new regulations.”

“The Trump Administration will continue to advance policies that create more American jobs, protect the safety of American workers and unleash our domestic energy potential in responsible ways,” Interior Department spokesman Nicholas Goodwin said in an email, calling the Obama-era rule “job-crushing” government overreach. The Bureau of Land Management is part of the department.

The regulation aimed to cut drillers’ emissions of methane, a potent greenhouse gas that escapes from oil and gas sites through leaks, flaring, and intentional releases. The Trump administration tried multiple times to roll back the regulation, but a federal court in California tossed the latest of those efforts earlier this year, putting the rule on track for revival.

But Chief Judge Scott W. Skavdahl ruled that the land bureau exceeded the its Mineral Leasing Act authority to reduce waste of oil and gas—and instead strayed into air quality standards.

“The record as a whole evinces a principle purpose and intent to curb air emissions from existing oil and gas sources,” he wrote.

‘Boomerang’

Opponents of the 2016 rule celebrated ducking the regulation once again. Western Energy Alliance President Kathleen Sgamma said her industry group was “overjoyed” by the news.

“Hopefully, we can quit playing boomerang between the two courts and get back to sensible regulation within BLM’s purview,” she said in a statement.

Greenberg Traurig LLP attorney Paul M. Seby, who represents North Dakota, called the ruling a clear rebuke of the bureau’s approach to cost-benefit analysis for the 2016 rule, “including that BLM cannot justify the rule based primarily on alleged environmental ‘co-benefits’” or a broad view of the costs of climate change.

The decision dismayed environmental advocates who have defended the Obama-era rule for years.

“Contrary to the court’s ruling, BLM has clear authority to prevent waste and protect people from harmful air and climate pollution,” Earthjustice attorney Robin Cooley said in an email. “We will continue the fight in the courts to restore these important protections.”

The ruling preserves two minor parts of the rule: a provision addressing the royalty-free use of production and an amendment that aligned the regulatory text with the Mineral Leasing Act.

The case is Wyoming v. Interior, D. Wyo., No. 2:16-cv-00285, 10/8/20.

(Adds comment from Interior in third paragraph.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloomberglaw.com

To contact the editor responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com

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