10/22/2020 - Legal Analysis - Student Work

Weighing the Risks of Using the CRA to Restore EPA’s Methane Standards

by Ari Sillman, JD 2021

The next Congress may be able to use the Congressional Review Act (“CRA”) to revoke the Trump administration’s recent amendments regarding the regulation of methane and volatile organic compounds (“VOC”) from the oil and gas industry. Use of the CRA would allow the next Congress to quickly reestablish Obama-era methane regulations and would make it easier for the EPA to regulate pollutants. At the same time, the CRA’s prohibition on agency adoption of substantially similar rules will likely generate legal challenges if the next EPA seeks to strengthen the Obama-era methane rules. While these legal challenges are unlikely to succeed, they do present a serious risk that policymakers should weigh against the CRA’s potential expediency.

Background

In September 2020, the EPA published two final rules relating to methane regulation in the Federal Register.[1] The final Review Rule lifted regulations limiting methane and VOC emissions from the transportation and storage sectors of the oil and gas industry and more broadly withdrew regulations limiting methane emissions across the source category.[2] The EPA also revised its interpretation of the Clean Air Act (“CAA”) in the Review Rule such that the agency would need to make a separate Significant Contribution Finding for each pollutant from a specific source before promulgating new source performance standards (“NSPS”) for that source category.[3] As a result of these changes, the EPA will have neither methane standards in place for new and modified sources in the oil and gas sector nor the legal predicate under section 111 of the CAA for regulating methane emissions from existing oil and gas industry sources, at least until it makes additional findings the agency now argues it must. In its second final rule, the Reconsideration Rule, the EPA adjusted technical standards for the oil and gas industry, which the agency projects will result in 450,000 tons of foregone methane emission reductions.[4] (For more information about these two rules and their potential impact on future regulation under the Clean Air Act, see this EELP explanatory piece on the rules.)

These rules will have a tremendous impact on a potential Biden administration’s ability to mitigate the impact of climate change and to create a net-zero greenhouse gas economy. Methane is “more than 80 times more powerful over a 20-year timeframe than carbon dioxide and is responsible for a quarter of the warming we have experienced to date.”[5] The Biden commitment to “achiev[ing] net-zero greenhouse gas emissions as soon as possible,”[6] will be far harder to achieve without limiting methane emissions. While a Biden administration EPA could promulgate new rules revoking the Trump administration’s Review and Reconsideration Rules, such a rulemaking process would take significant time and would likely face legal challenges.

Congressional Review Act and the Methane Rules

Given the need to rapidly reduce methane emissions, the a CRA resolution of disapproval offers a tempting path for quickly reversing the Review and Repeal rules deregulating methane emissions from the oil and gas sector. The CRA provides Congress with the ability to issue a joint resolution of disapproval of any rule within 60 session or legislative days of the rule’s publication in the Federal Register or its receipt by Congress.[7] If Congress adjourns before this period ends, the time period resets and the subsequent Congress has the ability to disapprove of the rule during a set window of time.[8] It’s unclear how many legislative days the 116th Congress has left before adjourning, but the Trump methane rules are likely to fall in the window where they would be subject to potential CRA revocation by the next Congress.[9]

The CRA defines the term “rule” broadly, incorporating the APA definition with a few exceptions.[10] The APA in turn defines a rule as “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy”[11] and rulemaking as an “agency process for formulating, amending, or repealing a rule.”[12]

When Congress formally disapproves of a rule, the CRA provides that such a rule “shall be treated as though . . . [it] had never taken effect.”[13] For rules styled as amendments to an existing rule, this language should mean that the existing rule would go back in to effect.[14] The Review Rule and Reconsideration Rule were both styled as amendments to the 2012 and 2016 NSPS for methane and VOCs.[15] If these amendments were revoked using the CRA, the law’s plain language indicates that the 2012 and 2016 standards for new and modified sources should go back into effect.[16] As a result, the EPA would again have the legal predicate for regulating methane from existing industry sources and the agency’s stricter reduction standards would return to effect.

Substantially Similar Bar

While restoring the Obama-era methane rules would be a significant improvement over the latest EPA regulations, revoking these regulations via the CRA may preclude the EPA from promulgating future methane rules absent express Congressional assent. This future preclusion may be particularly problematic for the Reconsideration Rule, but less problematic for the Review Rule.

The CRA provides that a rule subject to a joint congressional disapproval resolution “may not be reissued in substantially the same form, and a new rule that is substantially the same as such a rule may not be issued, unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution disapproving the original rule.”[17] The CRA does not provide a definition of “substantially the same,” and some fear that the law may limit a wide array of agency action in fields subject to a resolution of disapproval.[18]

A broad ban on adopting new regulations seems unlikely, however. First, courts have been reticent to consider the CRA when reviewing agency actions taken after a resolution of disapproval has been adopted, apparently heeding the CRA’s jurisdiction provision. The CRA notes that “[n]o determination, finding, action, or omission under this chapter shall be subject to judicial review.”[19] Courts have mostly interpreted this broad language to preclude them from ruling on agency compliance (or non-compliance) with the CRA[20], though some district courts have found to the contrary.[21] In Kansas Nat. Res. Coal. v. United States Dep’t of Interior, No. 19-3108, 2020 WL 4931375 (10th Cir. Aug. 24, 2020), for example, the Tenth Circuit held that the CRA’s plain language precluded judicial review of agency actions under the statute, notwithstanding subsequent legislative history.[22] Thus, it seems more likely than not that if a Biden EPA promulgated a subsequent rule addressing methane emissions at oil and gas facilities after Congress used the CRA to revoke either of the Trump rules, the courts would decline to take up claims that the rules were barred by the “substantially the same” language.[23]

Second, multiple agencies have reissued new rules covering similar topics to rules that were revoked through the CRA, suggesting that a Biden administration would not be broadly prohibited from regulating methane emissions. In 2019, for example, the US Department of Labor (“DOL”) reissued a rule governing drug testing as a pre-condition of receiving unemployment compensation from the state that was rescinded by Congress using the CRA in 2017.[24] DOL noted in its final rule that “[i]t is clear from a plain reading of . . . [the CRA’s substantially similar] provision that a reissued or new rule on the same subject is permitted provided that it is not substantially the same.”[25] DOL then used a plain language analysis of the CRA to conclude that “a rule is ‘substantially the same’ where it is for the most part the same as the prior rule.”[26] It further noted that changing the scope of a rule would be sufficient to comply with the CRA.[27] DOL stated that its new rule had a “substantially different scope and fundamentally different approach” to the one struck down via a CRA resolution of disapproval.[28] A Biden administration EPA might similarly distinguish a future methane rule from the revoked rules by noting that it focuses on increasing the scope of facilities covered or implementing more restrictive limits on emissions.

Still, there is significant uncertainty over how a future court might rule on either the jurisdictional or “substantially similar” issues. Thus far, no court has ruled on whether an agency action was substantially similar to a rule revoked by the CRA or whether it could even hear such a case. Given the increasingly conservative lean of the federal courts, it seems probable that a court may be inclined to scrutinize or even reject an interpretation of the CRA that in its view would provide administrative agencies with essentially unchecked authority to determine whether their rules are similar to revoked ones. This is particularly problematic in the context of the Reconsideration Rule. If a court were to find that it has authority to decide whether a rule is substantially similar to one revoked through the CRA, the EPA may find itself barred from issuing new technical standards that govern which oil producers are covered by the EPA’s methane rules, for example.[29] Given this uncertainty, decision makers would have to balance a range of considerations. The short-term advantage of a CRA resolution would be the immediate reinstatement of the standards, with the downside consequences remaining speculative and distant in time. Against this, EPA and Congress might consider that a rulemaking to reinstate the 2016 NSPS and its subsequent defense against challenges in the absence of a CRA resolution would be relatively straightforward given how recently EPA promulgated the original NSPS. Of course, if Congress were to revoke the Trump-era methane rules, the safest approach to ensuring that EPA could promulgate future regulations about methane control at oil and gas facilities beyond what was included in the Obama-era rules would be to concurrently reauthorize the EPA to regulate in these areas.

[1] See Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review, 85 Fed. Reg. 57018 (Sept. 14, 2020) (to be codified at 40 C.F.R. pt. 60), https://www.federalregister.gov/documents/2020/09/14/2020-18114/oil-and-natural-gas-sector-emission-standards-for-new-reconstructed-and-modified-sources-review [hereinafter Review Rule] and Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Reconsideration, 85 Fed. Reg. 57398 (Sept. 15, 2020) (to be codified at 40 C.F.R. pt. 60), https://www.federalregister.gov/documents/2020/09/15/2020-18115/oil-and-natural-gas-sector-emission-standards-for-new-reconstructed-and-modified-sources [hereinafter Reconsideration Rule].

[2] See Review Rule.

[3] See Review Rule. See also Hana Vizcarra, EPA’s Final Methane Emissions Rules Roll Back Standards and Statutory Authority, Environmental and Energy Law Program (Sept. 9, 2020),  https://eelp.law.harvard.edu/2020/09/epas-final-methane-emissions-rule-rolls-back-standards-and-statutory-authority/.

[4] See Reconsideration Rule.

[5] Pet’r Mot. for Stay Pending at 29, Environmental Defense Fund et al. v. Wheeler, No. 20-1359 (D.C. Cir. Sept. 15, 2020), http://blogs.edf.org/climate411/files/2020/09/EDF-Motion-to-Stay-EPA-Methane-Rescission.pdf.

[6] Biden-Sanders Unity Task Force Recommendations: Combating the Climate Crisis and Pursuing Environmental Justice 2, https://joebiden.com/wp-content/uploads/2020/08/UNITY-TASK-FORCE-RECOMMENDATIONS.pdf.

[7] 5 U.S.C. § 802.

[8] 5 U.S.C. §801(d)(1).

[9] A 2019 article noted that the probable date after which rules could be revoked was around May 19, 2020. See Daniel R. Perez, Upcoming CRA Deadline has Implications for Regulatory Oversight by Congress, Regulatory Studies Center (Dec. 11, 2019), https://regulatorystudies.columbian.gwu.edu/sites/g/files/zaxdzs3306/f/downloads/Commentaries/GW%20Reg%20Studies_CRA%20Lookback_DPérez_.pdf. While the COVID-19 pandemic has created significant disruption to the Congressional calendar, the methane rules are still likely to fall within the CRA window.

[10] See 5 U.S.C. §804(3).

[11] 5 U.S.C. § 551(4).

[12] 5 U.S.C. § 551(5).

[13] 5 U.S.C. § 801(f)

[14] See Congressional Research Service, The Congressional Review Act (CRA): Frequently Asked Questions 19 (2020), https://fas.org/sgp/crs/misc/R43992.pdf.

[15] See Review Rule; Reconsideration Rule.

[16] See, e.g., Effectuating Congressional Nullification of the Non-Subsistence Take of Wildlife, and Public Participation and Closure Procedures, on National Wildlife Refuges in Alaska Under the Congressional Review Act, 82 Fed. Reg. 52009 (Nov. 9, 2017) (to be codified at 50 C.F.R. pt. 32), https://www.federalregister.gov/documents/2017/11/09/2017-24324/effectuating-congressional-nullification-of-the-non-subsistence-take-of-wildlife-and-public, which effectuates Congress’ use of the CRA to revoke an amendment to wildlife takes in Alaska and notes that “[t]he U.S. Fish and Wildlife Service issues this document to effect the removal of any amendments, deletions, or other modifications made by the nullified rule and the reversion to the text of the regulations in effect immediately prior to the effective date of the non-subsistence take of wildlife rule.” Id.

[17] 5 U.S.C. § 801(b)(2).

[18] See, e.g., Ellen M. Gilmer and Pamela King, Law profs warn of ‘prolonged litigation’ if Congress kills rule, E&E News (May 9, 2017), https://www.eenews.net/stories/1060054230.

[19] 5 U.S.C. § 805.

[20] See, e.g., Montanans For Multiple Use v. Barbouletos, 568 F.3d 225, 229 (D.C. Cir. 2009) (“That latter provision denies courts the power to void rules on the basis of agency noncompliance with the Act. The language of § 805 is unequivocal and precludes review of this claim.”); see also Kansas Nat. Res. Coal. v. United States Dep’t of Interior, No. 19-3108, 2020 WL 4931375, at *9 (10th Cir. Aug. 24, 2020) (“There is nothing in the text of the CRA to suggest that § 805 applies only to a subset of these determinations, findings, actions, and omissions, depending on the actor who performs them. Instead, the CRA unambiguously prohibits judicial review of any omission by any of the specified actors.”); Ctr. for Biological Diversity v. Bernhardt, 946 F.3d 553, 563 (9th Cir. 2019) (“[W]e join our sister circuits which have likewise held that federal courts do not have jurisdiction over statutory claims that arise under the CRA.”).

[21] See, e.g., Tugaw Ranches, LLC v. United States Dep’t of the Interior, 362 F. Supp. 3d 879, 886-89 (D. Idaho 2019) (holding that the plain language of § 805 of the CRA is ambiguous and determining from legislative history and policy concerns that precluding judicial review would undermine the statute’s “primary purpose.”).  

[22] See Kansas Nat. Res. Coal., 2020 WL 4931375, at *9-11.

[23] But see Ctr. for Biological Diversity, 946 F.3d at 561 (noting that the CRA’s jurisdiction provision does not preclude courts from hearing constitutional challenges to the CRA). The CRA’s co-sponsors also noted in their joint signing statement that a court may review whether an agency “has the legal authority to issue a substantially different rule.” 142 Cong. Rec. S3683, S3686 https://www.govinfo.gov/content/pkg/CREC-1996-04-18/pdf/CREC-1996-04-18-pt1-PgS3683.pdf. This would suggest that the bill’s sponsors envisioned that the courts would have some authority to review agency actions related to the CRA. Such a view, however, has not been accepted by any circuit court.

[24] Federal-State Unemployment Compensation Program; Establishing Appropriate Occupations for Drug Testing of Unemployment Compensation Applicants Under the Middle Class Tax Relief and Job Creation Act of 2012, 84 Fed. Reg. 53037 (Nov. 4, 2019) (to be codified at 20 C.F.R. part 620) https://www.govinfo.gov/content/pkg/FR-2019-10-04/pdf/2019-21227.pdf.

[25] Id. at 53038.

[26] Id.

[27] Id. at 53037.

[28] Id. at 53038.

[29] The Reconsideration Rule exempted many small producers from having to comply with aspects of the EPA’s 2016 NSPS standards for VOCs. See Reconsideration Rule.