Several environmental organizations have petitioned the D.C. Circuit Court of Appeals and moved to block EPA from implementing a 90-day administrative stay of the New Source Performance Standards covering methane emissions from oil and gas infrastructure.  A group of states, plus the District of Columbia and the City of Chicago, have since moved to intervene in favor of petitioners.  Industry groups and conservative leaning states have lined up to support the agency’s action.  The rule, which focuses on detecting and repairing methane leaks, would have required oil and gas well owners and operators to complete initial monitoring by June 3, 2017.

Petitioners ague that EPA lacks the authority to issue a stay of finalized regulations under the Clean Air Act other than pursuant to 42 U.S.C. § 7607(d)(7)(B), which requires identification of an objection of central relevance to the rule that could not have been raised during the initial public comment period.  The groups claim that these conditions are not satisfied, as all the issues relied on by EPA were extensively deliberated during the public comment period, or at least could have been, and in any event are not centrally relevant.  For example, petitioners attack EPA’s claim that its rationale for including low producing well sites in the leak detection and repair program was not presented to the public, noting that EPA explicitly sought comment on this issue in its 2015 proposal.

Petitioners also contend that the stay is overboard and that the EPA’s failure to narrowly tailor it to the specific issues under reconsideration, or balance the equities involved, is arbitrary and capricious.

In response, EPA submits that 42 U.S.C. § 7607(d)(7)(B) establishes only when the agency must reconsider a rule, but that it has inherent authority to reconsider its decisions.  Its argument runs into a bit of trouble because the authority for the three month stay EPA initiated appears to be tied to a reconsideration pursuant to 42 U.S.C. § 7607(d)(7)(B).  Only secondarily does it defend its decision on the grounds that the conditions required by that section are satisfied.

This legal fight is part of a larger battle between the EPA and the environmental community over the rule.  On June 13, 2017, the EPA proposed an additional 2-year stay of portions of the regulations.  In particular, the agency has proposed to stay the fugitive emissions requirements, the well site pneumatic pump standards, and the requirements for certification of closed vent system by professional engineers.  Even if petitioners are successful before the D.C. Circuit, they will still have an uphill battle to maintain the rules indefinitely.  They do not dispute that the agency can initiate a separate rulemaking and likely permanently eliminate as much of the rule as it would like.

On May 18th, the D.C. Circuit Court of Appeals granted the EPA’s request to stay challenges to the New Source Performance Standards regulating methane emissions from oil and gas infrastructure, pending review of the rule in accordance with President Trump’s Energy Independence Executive Order.  EPA announced in April that it intended to reconsider the rule and was staying a future compliance date.

Since it was issued last year, the rule has been challenged by various oil and gas industry groups on the grounds that the EPA does not have the authority to regulate methane from oil and gas infrastructure. The challengers have signed on to the EPA’s motion to put the cases on hold pending a review of the current rules.

The President’s executive order specifically directed the EPA to review and reconsider the methane rules for new oil and gas infrastructure, and if appropriate, suspend, revise or rescind them. In its motion to put the cases on hold, the EPA argued that its review of the rules could impact the disputes awaiting resolution in the Court.

Various environmental groups, as well as several states, intervened in the dispute opposing the EPA’s motion, asserting that the EPA had not offered any concrete timeline for the review, rendering the hold indefinite.  The court rejected this argument, but did order the EPA to file status reports regarding its review every 60 days.

The precise fate of the rule is still uncertain, but it is likely it will be greatly rolled back, if not eliminated entirely.  EPA administrator Scott Pruitt has a long history fighting against precisely this kind of regulation of the oil and gas industry.  After President Trump’s decision to pull American out of the Paris Agreement, it is difficult to imagine the EPA leaving anything more than the bare minimum of the rule in effect.

A North Carolina appeals court has ruled that a company may be an “operator” of a hazardous waste disposal facility under RCRA Subtitle C based solely on post-closure involvement at the site.

The case, WASCO LLC v. N.C. Dep’t of Env’t & Nat. Res., Div. of Waste Mgmt., No. COA16-414, 2017 BL 125671 (N.C. Ct. App. Apr. 18, 2017), involved a former textile manufacturing facility. The site became contaminated after perchloroethylene (PCE), a dry-cleaning solvent leaked, from underground storage tanks. At the time the leaks occurred the site was owned by a division of Winston Mills, Inc. Five years after the leaks, Winston Mills entered into an agreement with the North Carolina Department of Environment and Natural Resource that detailed a plan to close the site, and the site was closed three years later. Defendant-petitioner WASCO LLC first became involved at the site years later, when it acquired a company that co-guaranteed indemnification for environmental liabilities at the site.   It subsequently took some action to affirmatively remediate the site and applied for a RCRA Part A permit.

By 2007, however, North Carolina discovered that hazardous waste was migrating offsite and contaminating groundwater. At that time WASCO disclaimed responsibility for further remediation and asserted that all previous involvement had been on a voluntary basis. It could not be an operator, it argued, because it did not become involved with the site until after it was closed and it is impossible to operate a closed site. WASCO asserted that it was not an “operator” under the language of the North Carolina Solid Waste Management Act, which defines the term as “any person, including the owner, who is principally engaged in, and is in charge of, the actual operation, supervision, and maintenance of a solid waste management facility and includes the person in charge of a shift or periods of operation during any part of the day.” N.C. Gen. Stat. § 130A-290(a)(21).

The court rejected WASCO’s arguments. It held that WASCO must be an operator despite its late involvement because the site was not designated as a disposal facility until after the site was closed. Accepting WASCO’s interpretation that operators are only entities responsible for pre-closure activities would, at least in this case, mean that the facility would have no operators at all. It also found that the trial court properly looked not only to the definition of operator in the North Carolina statute, but also at the broader definition in CERCLA, in addition to cases and guidance related to CERCLA and RCRA. These sources, it reasoned, are hazardous waste specific, while North Carolina’s more detailed definition applies to all solid waste management facilities.

Although the belated designation of the site as a hazardous waste disposal facility on account of the unintentional release of PCE distinguishes it from typical RCRA Subtitle C landfills, it is far from clear that this distinction was dispositive for the court. More likely it was guided by the principle of broad liability under RCRA, particularly when hazardous waste is involved.