EPA's Stay of Methane Rule Vacated

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By: Michael K. Reer

On July 3, 2017, the U.S. Court of Appeals for the District of Columbia Circuit vacated the U.S. Environmental Protection Agency’s stay of the final rulemaking “Emission Standards for New, Reconstructed, and Modified Sources.” The rulemaking amended the new source performance standards under the Clean Air Act for the oil and natural gas source category, most significantly for greenhouse gases and volatile organic compounds. Although the final rule took effect on August 2, 2016, EPA Administrator Scott Pruitt granted a petition seeking reconsideration of the rule on April 18, 2017 and issued a 90-day stay of the rule. By way of background, the Clean Air Act requires EPA to grant a petition for reconsideration, even after the effective date of the rule, if a petitioner makes an objection to the rule that was impracticable to raise within the comment period and that is of central relevance to the outcome of the rule. If EPA is required to grant the petition for reconsideration, the Clean Air Act allows a 90-day stay of the rule.

In granting several petitions for reconsideration, EPA stated that some aspects of the final rule were not logical outgrowths of the proposed rule. EPA reasoned that because the final rule was not a logical outgrowth of the proposed rule, petitioners did not have a fair opportunity to comment on the regulations that would become final. The Court of Appeals for the District of Columbia Circuit rejected EPA’s logical outgrowth argument, noting that in the preamble to the proposed rule, EPA requested comment on several regulatory concepts that were included in the final rule as regulations. In short, the Court of Appeals reasoned that even though parts of the final regulations were expressed as regulatory concepts in the proposed rulemaking – and not in terms of draft regulations – the final rule did not fail the logical outgrowth test.  

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