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Chevron Challenge to EPA Regulation of Oil Platforms Tossed (1)

Aug. 12, 2022, 3:27 PMUpdated: Aug. 12, 2022, 6:50 PM

Chevron USA must pursue its challenge to the EPA’s potential regulation of emissions from its offshore oil platforms near California that are being decommissioned in a different court, the D.C. Circuit ruled Friday.

The Clean Air Act only allows the US Court of Appeals for the D.C. Circuit to review the dispute if the Environmental Protection Agency’s action is “nationally applicable,” the court said. The agency’s letter at issue here is “locally or regionally applicable,” according to the ruling.

“Venue over Chevron’s challenge lies exclusively in the United States Court of Appeals for the Ninth Circuit,” the court said.

Chevron sued the agency after it told the company in an April 2021 letter that the platform is still a stationary source subject to air emissions regulations. The company is decommissioning the Gail and Grace drilling platforms in federal waters off the coast of Ventura County.

A platform that can’t emit air pollutants doesn’t qualify as an Outer Continental Shelf source of pollutants, Chevron told the court. The Trump administration had told the company that once a platform no longer emits pollutants, it could surrender its Clean Air Act Title V permits and skip additional permitting, according to the company.

The EPA said Chevron’s dispute belonged in the Ninth Circuit, not the D.C. Circuit, because its letters to the company weren’t nationally applicable.

The EPA also told the court that the company filed its challenge too early. It must instead wait for Ventura County to decide whether Chevron’s platforms need permits for decommissioning, the agency said.

The D.C. Circuit agreed with the agency and dismissed the company’s petition for review for lack of venue. Chief Judge Sri Srinivasan wrote the opinion and was joined by Judge Cornelia T.L. Pillard.

Judge David S. Tatel recused himself from the case after oral argument.

“We are reviewing the opinion carefully and considering whether to seek reconsideration of the panel’s decision,” Chevron spokesperson Bill Turenne Jr. said.

“But Chevron has already filed a protective appeal in the Ninth Circuit and stands ready, if necessary, to explain to the Ninth Circuit why we believe EPA’s April 20 letter is not consistent with the Clean Air Act’s rules for Outer Continental Shelf platforms,” he said Friday.

King & Spalding LLP and Hogan Lovells US LLP represented Chevron. The Justice Department represented the federal government.

The case is Chevron U.S.A. v. EPA, D.C. Cir., No. 21-01140, 8/12/22.

(Adds substantial updates throughout and replaces link to opinion. )

To contact the reporter on this story: Maya Earls in Washington at mearls@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com