To go directly to our Methane Emissions from New and Modified Oil and Natural Gas Sources section click here.
To go directly to our Bureau of Land Management Methane Waste Prevention Rule section click here.
To go directly to our Federal Energy Leasing & Permitting section click here.
To go directly to our Oil and Gas Exploration and Extraction in the Arctic sections click here. (Includes the Arctic National Wildlife Refuge and The National Petroleum Reserve in Alaska).
To go directly to our Significant Oil Pipelines section click here.
Methane Emissions from New and Modified Oil and Natural Gas Sources
By Carrie Jenks and Hannah Oakes
EPA is working to release a supplemental proposal with a final rule anticipated by summer 2023.
Under the Trump administration, EPA did not directly regulate methane emissions from oil and natural gas facilities. Rather, EPA’s regulations indirectly affected methane emissions through regulations targeting volatile organic compounds (VOCs) and through a Bureau of Land Management (BLM) Rule focused on methane waste on public lands.[1] In January 2021 however, President Biden’s Executive Order 13990 instructed EPA to rescind or revise President Trump’s emissions standards and to propose a rule covering methane and VOC emissions from existing sources.
In advance of COP26, President Biden and EU President Von der Leyen invited countries to support the Global Methane Pledge, launched by the US and EU, to reduce methane emissions 30 percent from 2020 levels. Over 120 countries have agreed to participate as of August 2022. The Biden administration’s regulatory efforts for oil and natural gas facilities will play a key role in achieving the US’ commitment, as the majority of methane emissions are from these sectors.
EPA has begun to respond to the order, however, Congress took the unusual step of using its authority under the Congressional Review Act (CRA) to disapprove one of President Trump’s oil and natural gas rules. This Congressional step eliminated the need for the Biden administration to propose and take comment on a rule withdrawing the Trump administration’s rule as the CRA required EPA to treat the disapproved rule as if it “had never taken effect.”[2] EPA, therefore, could begin its rulemaking process by strengthening the Obama administration’s 2016 rule. Additionally, the CRA prevents EPA from issuing “substantially the same rule,” which could be read to prevent a future administration from issuing a rule that deregulates methane from the oil and gas sector.[3]
In November 2021, EPA proposed new performance standards and emissions guidelines for methane emissions from oil and natural gas facilities under section 111 of the Clean AirAct.[4] In addition to more stringent requirements for new sources compared to the Obama administration’s rules, EPA also proposed, for the first time, emission guidelines for existing sources under section 111(d).[5] EPA estimates that the proposed new standards would result in 41 million tons of avoided methane emissions by 2035.[6]
EPA’s proposal builds on many of the recent breakthroughs in methane research and the development of advanced monitoring technologies and methods. For example, active research has improved our understanding of the nature and magnitude of methane emissions from oil and natural gas facilities, and EPA’s proposal focuses on malfunctioning equipment and operational upsets that lead to intermittent “super-emitting” events. EPA proposes to require more frequent on-the-ground leak surveys and enable more aerial surveys to find larger methane sources more quickly. EPA also included many technical questions for comment in the proposal to help the agency design an ambitious and legally durable final rule.
This fall, EPA intends to release a supplemental proposal to take comment on additional approaches and release a final rule in the by the summer of 2023. Once EPA finalizes the rule, states will undertake a process under Clean Air Act section 111(d) to develop compliance requirements for existing facilities in their state, consistent with EPA’s emission guidelines. Through this state-led process, likely starting around late 2023, states and stakeholders will have the opportunity to consider additional technology advancements, including any updated cost considerations. Given the speed of technology advancements we have seen over the past few years, state plans may be able to take advantage of additional emission reduction opportunities.
The Inflation Reduction Act amplified the forthcoming methane rules by creating a backstop methane waste charge that applies to oil and gas facilities unless and until the section 111 methane rule is in effect in all states. The Inflation Reduction Act also appropriates significant funding toward methane mitigation and monitoring, which can help drive development of advanced methane monitoring technologies that can serve as a basis for a section 111 rule. For more information on the Inflation Reduction Act’s impact on methane emissions, read our blog post here.
As with nearly all EPA regulations, litigation is expected following the finalization of the rule. As noted above, the CRA helps EPA avoid potential litigation over its decision to repeal the 2020 rule. The Inflation Reduction Act and CRA will provide EPA with a particularly conclusive defense to any major questions doctrine legal challenge as the bill includes a clear direction by Congress for EPA to finalize the rule reducing methane emissions from the sectors. Nonetheless, the legal durability of the requirements for new and existing sources will depend on the technical record EPA establishes through the rulemaking process.
For a more in-depth examination of the legal strength and technical ambition of the standards, read our white paper EPA’s Methane Proposal for the Oil and Gas Sector or listen to our podcast episode with Carrie Jenks and Kate Konschnik discussing the rules.
[1] The Obama administration released a rule that would have regulated methane from existing and new natural gas facilities, but the Trump administration delayed implementation of and then rescinded this rule. See Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources, 81 Fed. Reg. 35,824 (June 3, 2016); see also Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review, 84 Fed. Reg. 50,244 (Sep. 24, 2019).
[2] 5 U.S.C. § 801(b)(1).
[3] 5 U.S.C. § 801(b)(2).
[4] Section 111 of the Clean Air Act requires EPA to implement standards of performance that reflect the “degree of emission limitation achievable through the application of the best system of emission reduction [BSER] which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impacts and energy requirements) the Administrator determines has been adequately demonstrated. 42 U.S.C. § 7411.
[5] The Clean Air Act requires EPA to propose existing source requirements following EPA’s finalization of standards of performance for new or modified sources if such existing sources are not regulated under section 110 or 112 of the act. 42 U.S.C. § 7410; 42 U.S.C. § 7412.
[6] Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review, 86 Fed. Reg. 63,123 (proposed Nov. 15, 2021).
Bureau of Land Management Methane Waste Prevention Rule
By Abby Husselbee
BLM is expected to release a proposed rule soon with a final rule expected in 2023.
The Mineral Leasing Act of 1920 requires BLM to ensure that lessees extracting and producing oil and gas from public lands “use all reasonable precautions to prevent waste.” Based on this authority, the Obama administration released its Waste Prevention Rule. Among many measures for reducing methane emissions, the rule restricted venting and flaring of unwanted natural gas produced from oil wells and would have required operators to pay royalties on wasted gas.
In June 2017, the Trump administration postponed compliance with the rule and followed up with the 2018 Revision Rule that repealed much of the original rule. States and environmental groups filed lawsuits challenging the Revision Rule and the Ninth Circuit vacated it in 2020, effectively placing the 2016 Obama rule back into effect. However, soon after, the District of Wyoming vacated the 2016 rule, finding that it was beyond the scope of BLM’s statutory authority. Environmental groups appealed, but the Tenth Circuit has extended briefing deadlines several times since January 2021.
The Biden administration is now working to update the Waste Prevention Rule with a proposal currently being review by OMB. Given the litigation history for the two prior rules the Biden administration will need to ground requirements in the Mineral Leasing Act and can likely build on EPA’s November methane proposal to support its decision on technologies that are reasonably available to operators.
You can read more about this issue and stay updated on our BLM Methane Waste Prevention Rule Tracker Page.
Federal Energy Leasing & Permitting
By Abby Husselbee
The Inflation Reduction Act ties renewable development to continued onshore and offshore oil and gas leasing, so the Biden administration is likely to move forward with its leasing programs.
The Department of the Interior and its bureaus control where oil and natural gas drilling may occur on federal lands and waters and who has rights to drill in these areas. BOEM and BLM hold periodic lease sales, in which they sell drilling rights to the highest bidder.
In early 2021, President Biden revoked President Trump’s leasing executive orders and DOI revoked the Trump-era secretarial orders, both of which were designed to accelerate drilling and production. President Biden also issued an executive order that paused all new offshore and onshore oil and gas leases pending a comprehensive review of their impacts.
States challenged the leasing pause in the Western District of Louisiana, and the court granted the states preliminary injunction on the grounds that federal legislation prohibited the pause. On August 17, 2022, the Fifth Circuit vacated and remanded the pause on procedural grounds. The next day, in response to cross motions for summary judgement, the district court issued a permanent injunction against the pause in the thirteen states that sued.[7] However, the Inflation Reduction Act ties renewable projects to the auction of a minimum annual acreage for oil and gas development for the next ten years, and these requirements may shape how the Biden administration proceeds in this litigation.
Citing the Western District of Louisiana’s injunction, in April 2022, DOI announced that it would restart the onshore leasing program at an increased royalty rate of 18.75 percent. In June 2022, the Biden administration held its first least auction, auctioning about 20 percent of the acres that industry had initially nominated for final sale. Environmental groups have already challenged these lease sales, arguing that BLM failed to release cumulative impact statements as required by NEPA and that BLM’s decision to hold the lease sales violates the Federal Land Policy and Management Act, which requires BLM to “take any action necessary to prevent unnecessary or undue degradation of the lands.”[8]
Following the injunction, BOEM also restarted planning offshore lease sales. In November 2021, BOEM held Lease Sale 257 for an offshore lot in the Gulf Mexico—its largest sale offered to date. Environmental groups challenged the sale, arguing that the sale violated NEPA as the decision was based on an inadequate environmental review. On January 27, 2022, the District Court for the District of Columbia agreed and directed BOEM to conduct a new environmental review. The Biden administration did not appeal the decision, but industry groups did, and litigation is ongoing. BOEM also cancelled the three upcoming offshore lease sales, citing “lack of industry interest” and “conflicting court rulings” as reasons for the cancellations. However, the Inflation Reduction Act orders BOEM to hold the three cancelled auctions and issue the leases for cancelled sale 257. BOEM will now move forward with these four sales, which will require additional NEPA reviews.
Meanwhile, BOEM is planning future lease sales as required by the Outer Continental Shelf Lands Act. For example, in July 2022, BOEM released a proposal for its 2023-2028 offshore leasing program, which includes eleven potential sales in the Gulf of Mexico and Cook Inlet, Alaska over the next five years. Comments on the proposal are open until October 6, 2022.
As recent cases demonstrate, courts have been willing to strike down executive and administrative actions related to oil and gas leasing. As new litigation keeps coming, the Biden administration will have to continue considering its statutory authority and environmental review processes and adhere to the new statutory requirements set by the Inflation Reduction Act. For more potential implications of the IRA on the Biden administration’s offshore leasing plans, see our blog.
[7] Additionally, in a separate case challenging postponements of onshore lease sales during the Biden administration’s leasing pause, the District of Wyoming upheld the DOI’s authority. See Western Energy Alliance v. Biden, No. 2:21-cv-00013 (D. Wyo.).
[8] 43 U.S. Code § 1732; Dakota Resource Council v. Department of the Interior, No. 1:22-cv-01853 (D.D.C.).
Oil and Gas Exploration and Extraction in the Arctic
By Hannah Perls
The Arctic has become an important testing ground for the Biden administration’s climate and environmental justice goals. In addressing the Trump administration’s aggressive expansion of oil and gas activities in both the Arctic National Wildlife Refuge and the National Petroleum Reserve in Alaska (NPR-A), the administration often must weigh managing legal risk with commitments regarding greenhouse gas emissions reductions, conservation of natural resources, and consultation with and respect for Alaska Native and other tribal interests.
Arctic National Wildlife Refuge
Secretary Haaland paused all activities associated with the Coastal Plain Oil and Gas program, and litigation is ongoing.
The Trump administration prioritized opening the Arctic Refuge to oil and gas extraction, rushing to complete the environmental reviews required under NEPA before holding the first-ever Coastal Plain lease sale on January 6, 2021. After receiving bids on only eleven of the 22 sections offered for sale, BLM conveyed nine leases on President Trump’s final day in office. This lease sale was mandated under the Tax Cut and Jobs Act (Tax Act), passed by Congress in 2017. The Tax Act requires President Biden to hold another lease sale by December 2024 unless Congress passes legislation removing that provision.
As we discussed previously, the Biden administration paused all activities associated with the oil and gas leasing program in the Arctic Refuge’s Coastal Plain, pointing to “alleged legal deficiencies” in the program, including the underlying NEPA review. DOI is currently in the process of conducting a new environmental analysis of the Coastal Plain Oil and Gas Leasing Program. However, the Alaskan Industrial Development and Export Authority (AIDEA), a state agency, was the sole bidder on nine of the eleven leases sold and sued the Biden administration over the pause. AIDEA argues that the pause violates the Tax Act’s mandate for BLM to conduct the first lease sale by December 22, 2021.[9]
The administration’s pause on activities related to the Coastal Plain Program likely raises fewer legal risks than the legal challenges related to the government’s pause on new federal leasing. First, the Coastal Plain pause only applies to the activities related to leases already issued, whereas the nationwide moratorium paused all new federal onshore and offshore oil and gas leasing. In litigation over the activities pause in the Coastal Plain, AIDEA is arguing that the government violated the Tax Act and the APA for failing to seek public comment before issuing the pause. However, while the Tax Act does require DOI to issue rights-of-way or easements necessary for exploration, development, and extraction, the act does not specify a deadline for those activities as it does with the two lease sales. Furthermore, for DOI to issue those rights-of-way or easements, it must first complete its environmental review, which is currently in progress.
The pause also likely did not trigger APA requirements because the pause itself was not a policy reversal. Rather the pause gave the agency time to consider whether to conduct a new NEPA review, and BLM then solicited public comment on its notice of intent to prepare a supplemental environmental impact statement (SEIS) consistent with APA requirements.[10]
The future of the Coastal Plain Oil and Gas Leasing Program will depend on the outcome of DOI’s SEIS. BLM issued a notice of intent to prepare the SEIS on Aug. 4, 2021, initiating the scoping process, and anticipated releasing a draft SEIS in June 2022, though none has been released to-date. As mentioned above, under the Tax Act, the Biden administration is also required to conduct another lease sale by December 2024. However, many financial institutions have pledged not to finance oil and gas projects in the Coastal Plain.[11] In addition to these pledges, the regulatory uncertainty surrounding the oil and gas program may reduce interest in developing this region.
While BLM could also consider canceling the leases outright, this pathway would present additional legal risks. BLM’s regulations allow the agency to cancel oil and gas leases on public lands if those leases were “improperly issued,”[12] for example, if the agency failed to comply with NEPA or other procedural statutes. However, there is a provision in the Tax Act that requires BLM to manage the Coastal Plain program “in a manner similar to” leasing in the NPR-A.
Leases in the NPR-A may only be canceled under a narrower set of circumstances.[13] However, even under the NPR-A regulations, a court could successfully cancel the leases if it found they were improperly issued. Under President Trump, states and environmental and tribal groups challenged the Coastal Plain Oil and Gas Leasing Program as violating NEPA, the APA, and the Endangered Species Act, among other laws.[14] While the District Judge denied plaintiffs’ motion to block the lease sale on January 6, 2021, she based her decision in part on the fact that “the [record of decision] does not authorize any immediate on-the-ground activities” and such activities “would require further NEPA analysis based on the site-specific proposal.”[15] The litigation has been paused since September 13, 2021 while DOI reviews the Coastal Plain program.
For more information about the Arctic National Wildlife Refuge, visit our Regulatory Tracker page.
the National petroleum reserve in alaska (NPR-A)
DOI restored the Obama-era management plan for the reserve under which slightly more than half the reserve is open to leasing. A federal court vacated permits for ConocoPhillips’ Willow Project; the Biden administration declined to appeal the case, and released a draft supplemental environmental impact statement responding to the court’s critiques on July 8, 2022.
The administration has taken a very different approach in the NPR-A, which is subject to fewer environmental protections and has a far more advanced oil and gas program than in the Arctic National Wildlife Refuge. The NPR-A is the nation’s largest block of public land, encompassing over 22 million acres in northern Alaska. The NPR-A is also home to areas with significant subsistence, recreational, and environmental value, including the Utukok River and the Teshekpuk Lake area. In creating the NPR-A, Congress explicitly required that these and other significant areas designated by the secretary receive “maximum protection . . . to the extent consistent” with exploratory activities authorized by the statute.[16]
Under President Trump, DOI promoted expansive leasing and development in the reserve, including conducting multiple lease sales between 2017 and 2020. BLM also finalized a new Integrated Activity Plan and Environmental Impact Statement (IAP/EIS) on June 26, 2020, with the most protective alternative leaving 11.8 million acres available for leasing. Environmental groups sued, alleging that BLM failed to comply with NEPA. In December 2020, the administration issued a final Record of Decision (ROD) adopting the least protective alternative considered, opening nearly 18.6 million acres of formerly protected lands to leasing and development including parts of the Teshekpuk Lake area. On Trump’s final day in office, Secretary Bernhardt rescinded protections on 9.7 million acres in the NPR-A, consistent with the ROD.
To reverse this decision, the Biden administration chose to continue to defend the 2020 IAP/EIS, thereby avoiding the legal risks associated with reversing its previous position. Instead, the agency issued a new ROD selecting the most protective alternative considered (the “no action alternative”). As a result, the NPR-A will be managed under the 2013 Integrated Activity Plan, which includes protections for the Teshekpuk Lake area. The administration has not yet stated whether it plans to conduct a new IAP/EIS. If the administration does not replace the 2020 IAP/EIS, a subsequent administration could similarly reverse course and issue a new ROD relying on a less protective alternative, reopening protected areas to drilling.
Trump era land-use decisions have also constrained the administration’s legal options with regard to ConocoPhillips’ Willow Project, which is one of the largest proposed oil extraction projects on federal lands. Under President Trump, BLM approved the project on October 27, 2020. Alaska Native and environmental groups quickly challenged the decision, arguing that BLM and the US Fish and Wildlife Service (FWS) failed to consider the environmental and public health risks of the project.[17] The Ninth Circuit issued a preliminary injunction on February 13, 2021, preventing ConocoPhillips from breaking ground on the project until the litigation was resolved.[18]
Under the Biden administration, DOJ supported the project in briefs, but ultimately declined to appeal the District Court’s decision vacating the project’s permits. On July 8, 2022, BLM released a draft SEIS addressing the court’s critiques, including accounting for global greenhouse gas emissions. BLM did not indicate its preferred alternative in the draft SEIS, but did include a new alternative with enhanced protections for the Teshekpuk Lake Special Area.
It’s estimated that the Willow Project will produce more than 100,000 barrels of oil per day over the next 30 years, and will require the use of thermosiphons (“chillers”) to keep permafrost frozen near the project’s drill pads in light of current and future warming due to climate change. Under President Trump, BLM approved the project on October 27, 2020. Alaska Native and environmental groups quickly challenged the decision, alleging that BLM and FWS failed to consider the environmental and public health risks of the project.
For more on oil and gas development in the NPR-A, visit our Regulatory Tracker page.
[9] Alaska Indus. Dev. and Exp. Auth. v. Biden, No. 3:21-cv-00245-SLG (D. Alaska). The District Court granted the State of Alaska’s motion to intervene in the case on Feb. 11, 2022.
[10] Notice of Intent to Prepare a Supplemental Environmental Impact Statement for the Coastal Plain Oil and Gas Leasing Program, Alaska, 86 Fed. Reg. 41,989 (Aug. 4, 2021). Comments were due on Oct. 4, 2021.
[11] These include Goldman Sachs Group Inc., JP Morgan Chase & Co., Wells Fargo & Co., Citigroup, Morgan Stanley, and Bank of America. Hana Vizcarra and Hannah Perls, Biden’s Week One: Mapping Ambitious Climate Action, at 25, Harv. Env’t & Energy L. Program (Mar. 3, 2021), http://eelp.law.harvard.edu/wp-content/uploads/Bidens-Week-One-Report_030321.pdf.
[12] 43 C.F.R. § 3108.3(d).
[13] Leases in the NPR-A can only be canceled if (1) a lease is not producing oil and gas and the lessee fails to comply with any legal requirement, or (2) if the lease is producing, or known to contain “valuable deposits of oil or gas,” the lease can only be canceled via court order. 43 C.F.R. § 3136.3.
[14] Native Village of Venetie Tribal Gov’t, v. Haaland, No. 3:20-cv-00223-SLG (D. Alaska); Gwich’in Steering Comm. v. Haaland, No. 3:20-cv-00204 (D. Alaska); Nat’l Audubon Soc’y v. Haaland, Docket No. 3:20-cv-00205 (D. Alaska); Wash. v. Haaland, No. 3:20-cv-00224 (D. Alaska).
[15] Ord. Den. Mot. for Preliminary Inj., Native Village of Venetie Tribal Gov’t, No. 3:20-cv-00223-SLG (D. Alaska, Jan. 5, 2021).
[16] 42 U.S.C. 6504(a).
[17] Sovereign Iñupiat for a Living Arctic v. BLM, No. 3:20-cv-00290 (D. Alaska); Ctr. for Biological Diversity v. BLM, No. 3:20-cv-00308 (D. Alaska).
[18]Ord., Sovereign Iñupiat for a Living Arctic, No. 3:20-cv-00290 (D. Alaska, Feb. 13, 2021) (consol. with No. 3:20-cv-00308 (D. Alaska)).
Significant Oil Pipelines
By Hannah Perls
The Biden administration has taken contradicting stances over pipeline infrastructure. For example, President Biden revoked the permit for the Keystone Pipeline on his first day in office, yet allowed the Dakota Access Pipeline to continue to operate while the Army Corps prepares a new EIS. These projects present different legal issues depending on the scope of the administration’s authority over the project, decisions made under the Trump administration in project permitting, and subsequent litigation. In this section, I assess the key legal questions for the Dakota Access Pipeline, the Keystone Pipeline and the Enbridge Line 3 and Line 5 projects, and explore the durability of the administration’s choices regarding each.
dakota access pipeline
Despite significant opposition from tribes and environmental groups, the Army Corps of Engineers decided to keep the pipeline operational while preparing an Environmental Impact Statement. The pipeline still lacks a key permit from the Corps to cross under Lake Oahe in South Dakota.
The Dakota Access Pipeline crosses several significant water bodies and therefore requires easements from the Army Corps of Engineers (Corps).[19] Under President Trump, the Corps approved those easements on Feb. 7, 2017. The Standing Rock Sioux Tribe sued and the District Court for the District of Columbia vacated the easement. However, the DC Circuit issued an opinion on Jan. 26, 2021 leaving it to the Corps to decide whether to keep the pipeline operational while it prepares an EIS.
Despite persistent calls from tribes and environmental organizations, on May 3, 2021, the Biden administration announced it would keep the pipeline operational, pending the results of the EIS, which is expected this year. The Biden DOJ argued that because the injunction motion was fully briefed under the Trump administration, DOJ cannot now reverse position and seek an injunction (i.e., require the pipeline to stop operating). However, DOJ foreshadowed that a permanent injunction is still on the table, pending the results of the EIS: “The EIS process . . . examines many factors including some that may be relevant to the permanent injunction standard. It is possible that in the EIS process the Corps would find new information, but to date the Corps is not aware of information that would cause it to evaluate the injunction factors differently than in its previous filing.”
Looking ahead, the Corps could make new findings in its EIS that provide sufficient grounds for issuing a preliminary injunction. Those could include the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) notice of probable violation (NOPV) issued on July 23, 2021 to Energy Transfer LP for probable violations of federal pipeline safety regulations related to the Dakota Access Pipeline. The Corps also announced it paused the release of the draft EIS in order to further engage with the Standing Rock Sioux Tribe, though the Tribe withdrew as a cooperating agency in the EIS preparation process on January 27, 2022, citing transparency concerns. The Corps originally estimated that the new EIS would be completed by March 2022, but as of this publication, [[has yet to release an updated deadline.]]
In the Dakota Access litigation, Energy Transfer LP also sought Supreme Court review of two bedrock NEPA questions: whether NEPA requires an agency to resolve criticisms of an EIS before reaching a Finding of No Significant Impact (FONSI), and whether a NEPA procedural error is cause for vacating an easement. The Biden administration joined the Tribe in opposing cert, and the Supreme Court rejected the case on Feb. 22, 2022, though Justices Kavanaugh and Alito did not participate in the decision.[20]
For more information, see our Regulatory Tracker page on the Dakota Access Pipeline.
[19] Specifically, the pipeline borders and crosses under Lake Oahe, approximately 0.5 miles upstream of the Standing Rock Sioux Tribe, requiring a Section 408 easement. Section 408 of the Harbors and Rivers Act authorizes the Corps to grant permission to modify federal flood control and navigation projects. 33 U.S.C. § 408.
[20] Justice Alito and Justice Kavanaugh did not participate in the consideration or decision on the petition.