American Oil and Gas Reporter - May 2018 - 34

In The Courts

BLM Flaring Regulations Stayed Again
The Bureau of Land Management's
on-again/off-again venting and flaring
regulations were taken off the table again
in early April-at least temporarily.
Meanwhile, a group of state attorneys
general decided to come after oil and gas
methane emissions from a different direction by petitioning the U.S. District
Court for the District of Columbia to
order the Environmental Protection Agency
to begin writing rules under the Clean
Air Act to limit emissions from existing
oil and gas sources.
And in one other legal development,
several environmental organizations filed
to join a lawsuit initiated by the states of
California and New Mexico to reinstate
new royalty regulations adopted by the
Office of Natural Resources Revenue
under President Obama.
On April 4, according to published
reports, Judge Scott Skavdahl in the U.S.
District Court for the District of Wyoming
ordered a stay of the BLM's 2016 Waste
Prevention, Production Subject to Royalties, and Resource Conservation Rule
(i.e., venting and flaring regulation),
which required producers to reduce by
half methane flared from wells on public
and tribal lands.
"In consideration of judicial economy
and prudential ripeness and mootness
concerns," reports quote Skavdahl, "the
court finds the most appropriate and sensible approach is to . . . stay these cases
until the BLM finalizes the 'revision rule,'
so that this court can meaningfully and
finally engage in a merits analysis of the
issues raised.
"A stay will provide certainty and stability for the regulated community and
the general public while BLM completes
its rule-making process," he added.
Skavdahl's ruling came six weeks after
Judge William Orrick in the U.S. District
Court for the Northern District of California overturned BLM's Dec. 8 final
order that postponed implementing the
regulations until January 2019 (AOGR,
March 2018, pg. 30). It was the second
time the California court had stopped the
Trump administration's attempts to postpone the Obama-era regulation.
On Again/Off Again
Under Obama, BLM released its final
venting and flaring regulations in November 2016, although a number of provisions did not become effective until
January 2018. The rules were challenged
34 THE AMERICAN OIL & GAS REPORTER

immediately by the Western Energy Alliance and Independent Petroleum Association of America (AOGR, December
2016, pg. 32).
In June 2017, under President Trump,
BLM attempted to postpone compliance
for a year, utilizing Section 705 of the
Administrative Procedure Act, but in October, the Northern California District
Court invalidated that effort (AOGR, November 2017, pg. 30).
That same month, BLM initiated a
proposed rule making to postpone or
delay implementation, which it finalized
in December (AOGR, January 2018, pg.
24). The states of California and New
Mexico along with 17 environmental organizations filed lawsuits against that
rule in the California federal court.
The same day Orrick issued his order
against postponing the regulations, BLM
published a draft proposal in the Federal
Register to rewrite the regulation.
The day after Judge Skavdahl's ruling,
a coalition of 16 environmental groups
appealed it to the U.S. Court of Appeals
for the 10th Circuit in Denver. The state
of California joined the appeal on April
6, according to reports.
But pending adjudication of that, according to Western Alliance President
Kathleen Sgamma, the good news for
operators is that they do not have to
comply with the BLM venting and flaring
regulations for now.
Sgamma explains that while Judge
Orrick's ruling applies to the 2017 BLM
rule suspending the 2016 rule, Judge
Skavdahl's ruling applies to the 2016
rule itself. She says Skavdahl "stayed
compliance with the 2016 rule as a means
to avoid ruling on the merits of (the Alliance and IPAA's original 2016 lawsuit)
when BLM has so clearly communicated
that it is substantially rewriting the rule
and plans to be done in August. Both
rules are in effect, although the practical
effect of Skavdahl's ruling nullifies the
effect of the Orrick ruling."
Regulate Existing Sources
At the other end of the country, meanwhile, attorneys general for the states of
California, Connecticut, Illinois, Iowa,
Maine, Massachusetts, Maryland, New
Mexico, New York, Oregon, Pennsylvania,
Rhode Island, Vermont and Washington
as well as the District of Columbia and
city of Chicago, petitioned the D.C.
District Court to order EPA to promulgate

methane emission limits for existing oil
and gas sources.
IPAA Executive Vice President Lee
Fuller explains that when EPA released
New Source Performance Standards for
methane emissions from new and modified
oil and gas sources in June 2016, it also
announced its intention to gather information on emissions from existing sources.
The agency subsequently issued an information collection request in November
2016, but that was withdrawn by the
Trump administration in March 2017
(AOGR, April 2017, pg. 25).
The Trump administration also attempted to delay the methane NSPS for
new and modified sources in June 2017,
but was thwarted by the D.C. Circuit in
July and again on appeal in August
(AOGR, September 2017, pg. 33).
According to a statement from Pennsylvania Attorney General Josh Shapiro,
the AGs' April lawsuit attempts to restart
regulations aimed at existing oil and gas
resources. Their complaint argues that
Section 111 of the Clean Air Act requires
EPA to review and, if appropriate, revise
air pollution standards for specific categories of stationary sources, including
oil and gas facilities, every eight years,
which the lawsuit contends EPA has failed
to do in the case of existing sources.
It further alleges that "sources in existence prior to 2012 are projected to be
responsible for up to 90 percent of the
methane emissions in the oil and natural
gas sector," which it says account for 31
percent of all U.S. methane emissions.
The states claim those emissions "harm
plaintiffs and their citizens by significantly
contributing to air pollution that causes
climate change."
They ask the court to order EPA to
begin promulgating guidelines for methane
emissions from existing oil and gas sources
"pursuant to an expeditious deadline established by this court."
Pennsylvania AG Shapiro notes that
his coalition notified EPA last June of its
intention to sue if EPA failed to issue
standards for existing sources, "and the
Trump EPA has failed to take action."
Royalty Valuations
In addition, several environmental
groups, including the Natural Resources
Defense Council and the Wilderness Society, have petitioned to join a lawsuit
filed last October in the U.S. District
Court for the Northern District of Cali-

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