Methane ImageThe U.S. Environmental Protection Agency has asked a federal appellate court to hold in abeyance an ongoing legal challenge to Obama-era methane emissions standards for new and modified sources in the oil and gas sector as EPA considers whether to change the standards or abandon them altogether. (Am. Petroleum Inst. v. EPA, D.C. Cir., 13-1108). The methane rule, finalized in 2016, established New Source Performance Standards (NSPS) for methane emissions at new, modified and reconstructed oil and gas wells.  Dozens of states and industry groups filed legal challenges to the new standards that are currently pending before the United States Court of Appeals for the DC Circuit.

EPA’s request for the abeyance, filed April 7 in the DC Circuit, follows an Executive Order issued on March 28 by President Trump that directs federal agencies to “immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law.”

Earlier this month, the EPA, citing the March 28 Executive Order, announced that it initiated a review of the methane standards “and, if appropriate, will initiate proceedings to suspend, revise, or rescind it.” In the announcement, EPA indicated that if it concludes that suspension, revision or rescission of the methane standards may be appropriate, it will initiate a public notice-and-comment rulemaking process to take action on the standards, a process that would take time and would likely be challenged in court by environmental groups given the scientific record underpinning the regulations. EPA based its request for the abeyance on Trump’s Executive Order and its subsequent review of the methane standards.

There is little doubt that EPA Administrator Scott Pruitt will seek to roll back – and likely rescind – the methane standards given his record of suing EPA over Obama-era climate change regulations as then-Oklahoma attorney general.   After all, EPA was also expected to pursue methane standards for existing wells in addition to new and modified wells before Trump’s election, but Administrator Pruitt stopped that process earlier this year in one of his first official actions after his confirmation.

The chances are good that the D.C. Circuit will grant EPA’s request for the pause.  There is well-established precedent for EPA’s request, and the industry petitioners challenging the methane standards did not oppose EPA’s motion (although environmental activist groups that are intervening in the case have indicated they oppose the abeyance). And this week the D.C. Circuit granted a similar request by EPA for an abeyance in a case challenging the 70 parts per billion ozone national ambient air quality standards. EPA’s request to pause the ozone standards case was also based on the Trump Executive Order’s directive to review regulations impacting the energy sector and was opposed by environmental groups.