Federal Judge Halts Trump Administration Rollback of Oil Waste Prevention Rule

Oil pumps and natural gas burn off in Watford City, N.D., on June 12, 2014. (AP Photo/Charles Rex Arbogast)

OAKLAND, Calif. (CN) — In a late ruling Wednesday, a federal judge found the Bureau of Land Management failed to act rationally when it rescinded an Obama-era rule imposing certain waste prevention requirements that it deemed unduly burdensome on the oil and gas industry.

In a 57-page decision, U.S. District Judge Yvonne Gonzalez Rogers said she found the government’s process resulting in the rule’s rescission “wholly inadequate,” adding, “In its haste, BLM ignored its statutory mandate under the Mineral Leasing Act, repeatedly failed to justify numerous reversals in policy positions previously taken, and failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations.”

The Methane and Waste Prevention Rule, instituted by the bureau in 2016, called for banning the release of methane gas from wells – a practice known as methane flaring.

It also required oil and gas well operators to upgrade equipment, start leak detection and repair programs and pay for “avoidable losses” of natural gas.

But under the Trump administration in 2018, the bureau decided the rule was too onerous on the private sector. 

“Sadly, the flawed 2016 rule was a radical assertion of legal authority that stood in stark contrast to the longstanding understanding of Interior’s own lawyers,” Interior Deputy Secretary David Bernhardt said, adding that the bureau’s review of the rule found it overlapped with other state, tribal and federal regulations.

The repeal spurred a host of lawsuits from states and environmental groups, including two led by the Sierra Club and California and New Mexico. Gonzalez Rogers’ ruling applies to both.

The judge was careful to note that her ruling focuses on the rescission process and not the adequacy of the rule itself. 

She determined that the bureau misinterpreted the Mineral Leasing Act by establishing a definition of “waste of oil or gas” that runs contrary to the language of that statute, which mandates that the bureau require oil and gas lessees to observe “such rules … for the prevention of undue waste as may be prescribed by [the] Secretary,” to protect “the interests of the United States,” and to safeguard “the public welfare.”

The MLA also requires the bureau to ensure that “[a]ll leases of lands containing oil or gas … shall be subject to the condition that the lessee will … use all reasonable precautions to prevent waste of oil or gas developed in the land . . .”

While the bureau is afforded some deference in interpreting the MLA, Gonzalez Rogers found it didn’t provide a reasoned explanation for rescinding the 2016 waste prevention rule, noting it favors certain oil and gas companies that operate on federal lands. 

“Here, BLM does not explain why it ignored the market as a whole in favor

of economic protection of certain market players on federal lands. Compliance costs vary based on company size and location. Fluctuating oil and gas prices and other state regulatory regimes also impact the market. Periodic review is completely lacking. The analysis is complex and, in BLM’s rush to revise, it failed to provide any reasoned explanation,” she wrote. 

“As a result, the definition of ‘waste’ effectively protects inefficient players in the market to the detriment of others without explanation.”

The bureau also assumes operators would use low-bleed pneumatic controllers — equipment that reduces methane emissions — without being required to do so. 

“BLM baldly proclaims that it ‘expects many operators to adopt lowbleed pneumatic controllers even in the absence of’ a requirement to do so. BLM blindly trusts the industry to act voluntarily,” Gonzalez Rogers wrote. “Some may, but the real effect is that the new regulation protects the opposite of a ‘prudent’ or a market-based efficient operator.”

The judge also found the bureau failed to comply with the Administrative Procedure Act’s notice and public comment requirements, finding the rescission arbitrary and capricious. 

“BLM’s backwards approach to rulemaking is not acceptable. It cannot propose a rule based on a factual conclusion, provide no evidence for the same, and then, when confronted with the glaring inadequacy, attempt to backfill the record without public comment,” Gonzalez Rogers wrote.

The judge added that the bureau also failed to adequately weigh the negative health effects of pollution against the rule’s public health benefits.

Furthermore, she found the bureau disregarded the effects of oil and gas emissions on Native Americans living in low-income communities, writing, “BLM cannot discount the localized impacts to people for whom the public health impacts are of clear significance.”

The U.S. Department of Justice did not did not immediately return an email seeking comment Wednesday. 

California Attorney General Xavier Becerra released a jubilant statement on the ruling Wednesday evening, saying, “We applaud the court for slamming the door shut on yet another unlawful attempt by the Trump Administration to throw out the Waste Prevention Rule. California’s communities should not have to breathe in toxic air so that special interests can save a few dollars. The rule is a step in the right direction and is crucial to addressing the air pollution generated from California’s public lands.”

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