“All of the Above Energy”/ “Energy Dominance”: The Courts Strike Back on Climate Change

Although the Obama and Trump administrations differ markedly on climate change and energy policy, their oil and gas decisions are being similarly faulted by federal courts. President Obama had an “all of the above” energy policy that included the development of oil and gas but took addressing climate change as a serious obligation. President Trump has by executive order (EO 13783), agency policies (Secretarial Order 3360) and rulemakings rejected Obama climate change policies to support an “energy dominance” energy policy.

In March 2019, two federal courts considered two different phases of the Bureau of Land Management’s (BLM) oil and gas process—leasing and development—and found BLM’s National Environmental Policy Act (NEPA) analysis faulty for failing to adequately consider greenhouse gas (GHG) emissions and climate change impacts. WildEarth Guardians v. Zinke (D.D.C., March 13, 2019) (WEG) and Citizens for a Healthy Community v. BLM (D. Colo., March 27, 2019) (Citizens). Oil and gas lease holders in Wyoming and an oil and gas development in Colorado have been stymied as the courts direct BLM to improve its analysis of climate change impacts. The WEG court refused to vacate the leases, but on remand directed BLM to complete a new analysis before allowing development on existing leases or any new leasing. Although the industry has asked the administration to appeal the WEG decision, the administration’s next move is not clear. The Citizens court has asked for additional briefing on a remedy.

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Paris Agreement Exit: Who Holds the Real Power?

President Trump announced on June 1 that the United States is withdrawing from the Paris Agreement. The announcement follows months of uncertainty about whether President Trump would fulfill his campaign pledge to withdraw U.S. participation in the deal (which was signed by 195 countries with only two countries in opposition--Nicaragua (because it wasn’t stringent enough) and Syria).

According to the President, the decision is necessary to protect the U.S. economy from burdensome emissions restrictions and foreign interference in U.S. energy policy:

In order to fulfill my solemn duty to protect America and its citizens, the United States will withdraw from the Paris climate accord . . .[s]o we're getting out, but we will start to negotiate, and we will see whether we can make a deal that’s fair.

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Mission Assurance is Energy Assurance*

* This blog is co-authored with Sarah Ruckriegle, a graduate of the Air Force Academy, current Captain in the Air Force and law student at the University of Las Vegas where she is based.  Heidi Ruckriegle is an Associate with the Welborn firm.  

The United States Department of Defense (“DoD”) is the world’s single largest user of fossil fuels. DoD is comprised of three branches—Air Force, Army, and Navy—and reliable, affordable, and available energy is critical to each of their missions. The military spends $4 billion dollars a year to meet its energy needs and two-thirds of that energy is petroleum. Of the branches, the Air Force is responsible for using more than 2.4 billion gallons of jet fuel annually, making it the highest energy consumer. By contrast, the Navy uses roughly 1.3 billion gallons of fuel annually. The Army consumes much less energy because of its reliance on the Air Force and the Navy for transportation. The Army’s energy use is concentrated in its installations, which consume an average of 661.5 million gallons of petroleum each year.

DoD has identified its oil supply chain to the military’s land, water, and air equipment as a point of vulnerability. Aerial refueling and convoys transporting fuel can be extremely dangerous. In its 2011 Strategic Sustainability Performance Plan, DoD wrote “attacks on fuel convoys and fixed energy supplies in Afghanistan, Iraq and surrounding countries already demonstrate the vulnerability of our current supply networks.” A 2009 Army Environmental Policy Institute report shows that between 2003 and 2007 approximately 50% of more than 3,000 U.S. troops and contractor deaths or injuries were attributable to fuel supply convoys in Afghanistan and Iraq. To reduce dependence on supply chains and oil, the military is broadening the use of solar and other renewable sources in meeting its defense mission.

The move to renewables will also help DoD meet new national directives to conserve energy and increase the use of renewable energy:

• the Energy Independence and Security Act of 2007 requiring federal agencies to improve energy intensity by 30% as compared with 2003 baseline;
• the National Defense Authorization Act of 2007 mandating DoD secure 25% of its energy from renewable resources by 2025; and
• Executive Order 13514 issued by President Obama on Oct 5, 2009, directing federal agencies to develop and implement an annual Strategic Sustainability Performance   Plan to the Council on Environmental Quality between 2011 and 2021 and ensure federal buildings designed in 2020 or later are net zero for energy, i.e., not using more   energy than they produce, by 2030.

Further, in enhancing its renewable energy portfolio, DoD is also responding to two emerging threats to its operations around the world: climate change and cyberterrorism. Internal studies have documented the military’s vulnerability to disruptions to the power supply from cyber attacks and long-term impacts from global warming. In many parts of the world, DoD looks at global warming as a “threat multiplier,” meaning that increased pressure from progressively more severe weather is expected to exacerbate economic and political issues. Similarly, DoD is vulnerable in our wired, internet-centered, world. The April 2015 DoD Cyber Strategy focuses on building capabilities for effective cybersecurity and cyber operations to defend DoD networks, systems, and information.

The military’s ability to employ a defense force, execute a mission, or train for the future, is heavily dependent on fuel and the electricity that powers installations and operations. The various branches have identified “energy resilience” as a critical objective. The Army developed innovative private-sector funding of solar installations, a successful program that later launched the Office of Energy Initiatives in 2011. In turn, the Air Force has set the standard for utility-scale solar with its 14 megawatt giant in 2007, called “Nellis I” after its Air Force Base home. Nellis Air Force Base opened a second major solar array in February of this year. Seeking to strengthen alternative energy, the Navy has an ambitious goal of getting 50 percent of its energy from renewable sources by 2020, while the Air Force and Army maintain more modest goals of 25 percent.

Solar maintains its position as the renewable resource of choice at military installations because tall wind turbines create the potential for collision danger to military aircraft operations and generate “clutter” from close-by wind turbine projects impacting airborne military radar capability. The hazards to air safety and surveillance presented by wind energy are unacceptable to DoD. However, as DoD continues to enhance its energy portfolio, geothermal and biomass have gained more recognition as possible alternatives. Each of the armed services has also established programs geared toward alternative fuel to replace petroleum in their tactical weapons systems such as aircraft, combat ships and vehicles, and supporting equipment. DoD currently uses gasohol and biodiesel in administrative and other nondeployable vehicles but continues to evaluate and test other alternative fuels (e.g., hydrotreated renewable oils, coal-derived or algae-derived fuels) for military applications. Considerations include whether the alternative fuel is cost-competitive, performance consistent, and emitting fewer greenhouse gasses.

On April 6, 2016, the Army and Air Force signed a Memorandum of Understanding confirming a common commitment to securing military installations with energy that is clean, reliable, and affordable. Large-scale renewable projects at military installations independent from the grid can keep the lights on in the event there is a cyber attack or severe weather event that knocks out power. Renewable energy projects located on or near military bases are vital to keeping missions and operations fully functional at a time when the Armed Services are increasingly reliant on electricity to keep the country safe.

The Air Force is aware that its global role and presence has changed; it needs guaranteed power for remotely piloted aircraft missions, missile launches, space launches, and satellite control. With new remote-controlled technologies, the Air Force has been fighting more battles from domestic bases—as a result installation energy security is even more important. Looking forward, the Air Force believes that in order to build resiliency its budget is better spent on renewable projects that cost less than traditional grid energy. Beyond domestic bases, the Air Force is also working on ways to improve energy reliability for its expeditionary forces by developing modernized equipment using solar panels and batteries rather than the expensive and dangerous conventional convoys or airdrops of fuel supplies.

DoD’s development of renewable energy is viewed by the agency as necessary but has faced some criticism on the Hill from renewable energy skeptics. Disagreements exist as to whether the DoD's efforts to move to renewable energy are more about politics than saving lives and boosting security. Among lawmakers' complaints is concern that the military is paying a higher price for some forms of renewable energy at a time when DoD proposes cutting weapons programs and reducing forces in order to meet budget mandates. DoD officials insist that their efforts focus on a single goal: finding the best way to power military missions.

National security will always be the Unites State’s top priority. In the words of George Washington, “to be prepared for war is one of the most effectual means of preserving peace.” How renewable energy will play a role in DoD strategy is just beginning to take shape.

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“Keep it in the Ground” – Part II

After the President denied the Keystone XL pipeline, climate change activists have turned their attention to federal fossil fuel leasing, discussed in our recent blog post: What’s Next, Post Keystone XL? “Keep it in the Ground!”.  The “Keep it in the Ground” proponents argue the President should abandon his “all of the above” energy policy for one that bans all future leasing of federal fossil fuels.

The argument has resulted in divided opinions—even within the Obama Administration. While Interior Secretary Sally Jewell has called the movement unrealistic and simplistic, EPA’s Administrator, Gina McCarthy, seemed to validate the environmentalists’ position by noting it would not be “extreme” for the government to ban all coal, oil, and natural gas production on federal lands.

Ultimately, for the Obama Administration, and future administrations, this policy argument raises a legal question: Could the Secretary of the Interior completely stop all federal coal and on and offshore oil and gas leasing? To answer that question, the Mineral Leasing Act of 1920 (“MLA”), as amended, the Federal Land Policy and Management Act (“FLPMA”) and the history of federal mineral management must be examined.

As Congress encouraged the settlement of the West, it began to take steps over time to retain management and ownership over federal minerals. Congress passed the Enlarged Homestead Act in 1909, 43 U.S.C. § 218, which allowed individuals to obtain title to up to 320 acre parcels without any reservation of the mineral estate to the government. In the subsequent Stock-Raising Homestead Act of 1916, Congress reserved “all coal and other minerals” to the federal government. 43 U.S.C. § 299; see also Watt v. Western Nuclear, Inc. 462 U.S. 36, 47 (1983) (observing Congress did not wish to entrust the development of valuable minerals to ranchers and farmers). Similarly, in the Coal Lands Acts of 1864 and 1873 the government conveyed lands without reserving the coal, but reversed course in later amendments in 1909 and 1910. The 19th and 20th century railroad acts also evolved from grants without reservation to surface-only grants.

In 1920, Congress enacted the Mineral Leasing Act of 1920, 30 U.S.C. § 181 et seq., to provide for more efficient development of federal oil, gas, and coal deposits. Section 226 of the MLA provides for leasing of oil and gas. Section 226(a) declares that “[a]ll lands subject to disposition under this [Act] which are known or believed to contain oil or gas deposits may be leased by the Secretary.” 30 U.S.C. § 226(a). The U.S. Supreme Court has found this language to provide the Secretary with discretionary authority to lease federal minerals. Udall v. Tallman, 380 U.S. 1, 4, (1965); see also Bob Marshall All. v. Hodel, 852 F.2d 1223, 1230 (9th Cir. 1988) (the MLA “allows the Secretary to lease such lands, but does not require him to do so.... [T]he Secretary has discretion to refuse to issue any lease at all on a given tract”). But does this secretarial authority to choose not to lease a particular parcel or tract of federal minerals extend to termination of the entire federal minerals leasing program? Such action does not appear to be the intent of Congress.

Congress enacted the MLA to “promote the orderly development of the oil and gas deposits in the publicly owned lands of the United States through private enterprise.” Harvey v. Udall, 384 F.2d 883, 885 (10th Cir. 1967). In California Co. v. Udall, the court stated that the Department of the Interior must administer the MLA “so as to provide some incentive for development.” 296 F.2d 384, 388 (D.C. Cir. 1961). The Mining and Minerals Policy Act of 1970, 30 U.S.C. § 21 et seq., emphasized the critical importance of federal mineral development and the essential role of the private sector and directed Interior to “foster private enterprise.”; see also Mountain States Legal Found. v. Andrus, 499 F. Supp. 282, 392 (D. Wyo. 1980) (“The Secretary of the Interior must administer the Mineral Leasing Act so as to provide some incentive for, and to promote the development of oil and gas deposits in all publicly-owned lands of the United States through private enterprise.”).

The Federal Onshore Oil and Gas Leasing Reform Act of 1987 amended the MLA to establish a competitive leasing system. 30 U.S.C. § 226(b)(1)(A). As amended, the MLA mandates the BLM to conduct lease sales “for each State where eligible lands are available at least quarterly and more frequently if the Secretary of the Interior determines such sales are necessary.” 30 U.S.C. § 226(b)(1).

“Keep it in the Ground” supporters argue that the Secretary could use the FLPMA land use planning authority to determine that no eligible lands are available in any state to effectively impose a nationwide moratorium on all new federal leasing. This argument ignores the above statutory mandates and overstates the Secretary’s limited authority to withdraw lands from leasing.

FLPMA established the federal policy to retain federal lands and to manage for multiple uses through the land use planning process to best meet national interests. 43 U.S.C. § 1701(a). FLPMA includes mineral development in its list of permitted multiple uses: “[T]he public lands [are to] be managed in a manner which recognizes the Nation’s need for domestic sources of minerals, food, timber, and fiber from the public lands . . .” Id. at (a)(12). Further, the Act requires that “the United States receive fair market value of the use of the public lands and their resources…” Id. at (a)(9). In this same section at (a)(4) Congress reserved its power to “exercise its constitutional authority to withdraw or otherwise designate or dedicate Federal lands for specified purposes and that Congress delineate the extent to which the Executive may withdraw lands without legislative action,” and specifically limited the Secretary’s withdrawal authority in size and to no longer than 20 years. 43 U.S.C. § 1717(d).

Read together, FLPMA’s management directives suggest that, at a minimum, a decision to withhold lands from leasing would need to be made on a site-specific basis through land use planning and that such withdrawal could not be made permanent without the authorization of Congress. See Norton v. S. Utah Wilderness All., 542 U.S. 55, 58 (2004) (explaining FLPMA’s multiple use mandate and noting lands not compatible with this mandate are identified by the Secretary on a site-specific basis as part of the land use planning process); see also Lujan v. Natl. Wildlife Fedn., 497 U.S. 871, 877 (1990) (discussing FLPMA’s direction that the Secretary “determine whether, and for how long, the continuation of the existing withdrawal of [selected] lands would be, in his judgment, consistent with the statutory objectives of the programs [other than multiple use] for which the lands were dedicated.”). FLPMA’s multiple use mandate—which includes mineral development— must be read in coordination with the MLA and the Mining and Minerals Policy Act. 43 U.S.C. § 1701(a)(12)(“including implementation of the Mining and Minerals Policy Act of 1970”).

As climate activists continue to press the government to transform federal leasing or simply keep federal fossil fuels in the ground, we can expect “policy forcing” litigation to follow. See, e.g., WildEarth Guardians v. Jewell, 738 F.3d 298, 312 (D.C. Cir. 2013) (rejecting the argument that BLM coal leasing in the Powder River Basin failed to properly consider global climate change); see also McKeown, Matthew J., “Emerging Clarity: Trends in Air Quality Litigation Arising from Federal Public Land Mineral Development,” vol. 58, ch. 25 (Rocky Mt. Min. L. Fdn. 2012). Courts and possibly Congress will be the ultimate arbiters of this movement giving a final word on whether the MLA, FLPMA, and the legislative history authorize the Secretary of the Interior to completely stop all federal coal and on and offshore oil and gas leasing.

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What’s Next, Post Keystone XL? “Keep it in the Ground!”

With the rejection of the Keystone XL pipeline by President Obama as part of the Administration’s “package” of climate change actions to deliver to the UN Conference on Climate Change in December, activists and their political allies have turned to the next battlefield – stopping the leasing of federal minerals. http://goo.gl/mU8qia

On November 4, Senator and presidential candidate Bernie Sanders (I-VT) and Senator Jeff Merkey (D-OR) introduced legislation to stop future federal oil and gas leasing in the Outer Continental Shelf and all federal leasing of onshore coal, oil, tar sands, gas and oil shale. The “Keep it in the Ground Act” also would prohibit the renewal of any “nonproducing” lease and cancel existing leases in federal waters off Alaska. See, S 2238, “To prohibit drilling in Outer Continental Shelf, to prohibit coal leases on federal land and for other purposes.” https://www.congress.gov/bill/114th-congress/senate-bill/2238

The President of the Natural Resources Defense Council ( and former Obama Interior Assistant Secretary) Rhea Suh applauded the legislation, “ Phasing out coal, gas and oil production in our federal lands and waters must be part of our broader strategy to shift from dirty fuels that drive climate change to clean energy.” Suh explained that, “Ending new leases for fossil fuels will prevent the release of 90% of potential emissions from federal fossil fuels. Federal lands and waters should be managed . . . to promote the rapid transition to the clean energy economy by keeping fossil fuels in the ground.” Bill McKibben, 350.org founder and anti-Keystone organizer, told Rolling Stone, “Effective action would require actually keeping most of the carbon the fossil fuel industry would like to burn safely in the soil.” The Center for Biological Diversity has led local “keep it in the ground” protests of BLM oil and gas lease sales in Wyoming and Colorado arguing federal fossil fuels represent 450 billion tons of carbon equivalent that should not be burned.

The movement, an offshoot of the fossil fuel divestment campaign, is informed by two studies that identified the potential GHG emissions from undeveloped fossil fuels. A study published in the journal Nature in January analyzed the question at a global scale and found that 80% of world coal reserves need to stay in the ground to avoid the “tipping point” of an elevation in global temperature of 2 degrees C. In the United States, The Wilderness Society and Center for American Progress retained Stratus Consulting in 2012 and 2014 to analyze the GHG emissions from extracting and burning federal fossil fuels. The 2014 update found that federal lands and waters “could have accounted for 24% of all energy-related GHG emissions in the United States in 2012” and “combustion of coal from federal lands accounts for more than 57% of all emissions from fossil-fuel production on federal lands.” See Center for American Progress (March 19, 2015). https://goo.gl/aPiMwJ .

At the end of September, Sierra Club, WildEarth Guardians, 350.org, EarthWorks among 400 environmental organizations presented a letter to President Obama calling on him to “keep federal fossil fuels in the ground.” The groups, citing the above reports, argue that federal leasing contributes “significantly” to U.S. and global GHG emissions and that under existing laws “you have the clear authority to stop new leases. With the stroke of a pen, you could take the bold action needed to stop new federal leasing of fossil fuels . . . .” An accompanying legal analysis argues that the Mineral Leasing Act, the Surface Mine Control and Reclamation Act, the Outer Continental Shelf Lands Act and the Federal Land Policy and Management Act grant considerable discretion to the Secretary of the Interior on whether to lease and that some of these acts grant the Secretary or the President the authority to withdraw lands from leasing. It is legally doubtful whether these acts would provide the authority to the Executive branch to cease all leasing of federal minerals which under the U.S. Constitution Article IV, Sec. 3 are under the plenary authority of Congress. Moreover in the Mineral Leasing Act (30 U.S.C, § 226(b)(1), Congress has directed quarterly lease sales and in the Mining and Mineral Policy Act of 1970 made clear that, “it is the continuing policy of the Federal Government in the national interest to foster and encourage private enterprise in (1) the development of economically sound and stable domestic mining, minerals, metal and mineral reclamation industries …” 30 U.S. C. § 21a.

While the “Keep it in the Ground Act” stands no chance of passage in this Congress, and Interior Secretary Jewell has rejected this approach has oversimplifying “a very complex situation to suggest we could simply cut off leasing or drilling on public lands and solve the issues of climate change,” she has embraced a suite of regulatory initiatives that environmentalists and their supporters have argued are part of this initiative. For example, in March in a major policy speech previewing BLM regulatory reforms, Secretary Jewell stated, “[W]e also need to do more to address the causes of climate change. Helping our nation cut carbon pollution should inform our decisions about where we develop, how we develop and what we develop.”

The Wilderness Society argues that a soon-to-be issued BLM rule to reduce venting and flaring and the already published draft revisions to Onshore Orders 3, 4 and 5 (https://goo.gl/2Dckrm and https://goo.gl/idRLrd ) to require the installation of meters on federal wells will help to limit GHG emissions from federal leasing. They also argue, and are joined in this argument by Democratic presidential candidate Hillary Clinton, that Interior should raise the royalty rates for coal and oil and gas to account for “the full costs of carbon pollution.” In June, Clinton called for “additional fees and royalties from fossil fuel extraction [to be used] to protect the environment.” Secretary Jewell announced a proposal to consider raising the royalty rate earlier this year. http://goo.gl/eKbNny And, the recently issued BLM resource management plan amendments for the Greater sage-grouse demonstrate the BLM’s willingness to use its FLPMA authority to withdraw millions of acres of federal minerals and limit the leasing of oil and gas for conservation purposes. Each of these requirements will incrementally “keep” a portion of federal fossil fuels “in the ground” which is the goal of that campaign.

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ENERGY TRANSFORMATION: CLEAN POWER PLAN AND THE WEST

When candidate Obama was running in 2008, he identified energy as his top priority and described his goal as the “transformation of American energy” to address the threat of climate change. On August 2, 2015, the President and the EPA Administrator announced the final rule to implement his Clean Power Plan. The focus of the rule is the reduction of carbon emissions from 2005 levels by 32% in 2030.

The rule is issued under the authority of the Clean Air Act Section 111(d) in what many acknowledge is a big stretch for language that was drafted long before climate change was an issue. The rule came as the result of a 2012 settlement of litigation brought by environmental groups and several northeastern states against EPA. See a just-released Senate Majority Staff, Environment and Public Works Committee Report, “Obama’s Carbon Mandate: An Account of Collusion, Cutting Corners, and Costing Americans Billons” on this “sue and settle” tactic. http://goo.gl/gLaviN

The rule addresses new and existing power plants and establishes a different carbon target reduction from a 2012 baseline for each state. According to EPA, each state has the flexibility to choose how it meets its own carbon targets, but the rule is built on three EPA “building blocks”:
• Make fossil fuel power plants more efficient
• Increase generation form lower-emitting combined cycle natural gas plants for reduced generation from higher emitting coal/gas-fired power plants
• Increase generation from new zero-emitting renewable energy power sources
If a state refuses to develop a plan consistent with the rule, EPA will enforce a federal model plan. The rule encourages states to work together and to develop a “cap and trade” program, similar to a proposal that failed to pass Congress in the President’s first term.

EPA projects compliance costs for the rule of between $$5.1-8.4 billion, with an individual’s energy costs increasing by 3%-1% early in the compliance period, but dropping to a net “savings” in 2030 as a result of reduced energy consumption.

Winners and losers? Obviously coal is the big loser, but surprisingly natural gas also came up short with the Administration backing away from gas as a “bridge fuel” in favor of incentives to support wind and solar generation and demand reduction.

The rule is voluminous – existing power plants are addressed in over 1800 pages, new and modified plants are covered in 900 pages and the EPA model federal plan clocks in at 755 pages. See http://www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants

What does the rule mean for the West? Much to the relief of Alaska (and Hawaii) there is no carbon target for these states, yet. Several western states are already on track to meet their carbon targets by 2030 as the result of state law and/or an energy mix already reliant on renewables: California, Washington, Oregon, Nevada and South Dakota. The biggest loser among the states is North Dakota, which saw its 2030 target quadruple from an initially proposed 10.6% reduction to a 44.9% reduction in the final rule. Democratic North Dakota Senator Heidi Heitkamp described the rule as a “slap in the face.” Wyoming, which supplies 70% of the nation’s coal, saw its target double from the draft rule to a 37-44% reduction in the final rule. Wyoming elected officials uniformly attacked the plan with Wyoming Senator Barasso (R) calling it a “job crushing mandate.” Montana was also hit hard with a doubling of its draft goal to a 41% reduction. Montana’s Democratic Governor Bullock said he was “extremely disappointed” by the change, and Montana’s AFL-CIO, which had planned to attend a rally in support of the rule, withdrew in light of the impact of the changed targets on union jobs.

In Utah, where 80% of its power is coal-fired and its renewable energy is sold out of state, elected officials denounced the plan; Senator Orrin Hatch (R) said the rule is “unjustified and potentially devastating for Utah and the nation.” In Colorado, reaction to the state target of a 28% reduction was divided along party lines, with the Democratic Governor Hickenlooper saying he will work to implement the target while Republican Attorney General Cynthia Coffman is considering joining in litigation to challenge the rule. In New Mexico, Republican Governor Susana Martinez and Democratic Senator Tom Udall were united in their belief that New Mexico was ready to comply with the law. See EPA-prepared charts for good summary of state-by-state impacts. https://goo.gl/4rScB4

Opinion among green groups is divided with Environmental Defense Fund Fred Krupp praising the rule as “historic” and an example of Presidential leadership, while the climate researcher and former NOAA scientist, James Hansen, derided the rule as “practically worthless.” The New York Times, in a front page story this week seemed to be “shocked” (see “Casablanca”) that the coal industry was already planning on how to defeat the rule before the rule was published. http://goo.gl/x0yzd3

There is 100% agreement on one thing -- the Clean Power Plan is headed for the courts as soon as EPA publishes the official version of the rule in the Federal Register expected later this month.

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EPA Proposes Methane Emissions Cuts for Oil and Gas to Meet Climate Change Goals

On January 14, 2015, the Obama Administration announced a plan to reduce methane emissions from oil and gas operations by 40 to 45 percent by 2025. http://www.whitehouse.gov/the-press-office/2015/01/14/fact-sheet-administration-takes-steps-forward-climate-action-plan-anno-1

This announcement is part of the implementation of the President’s 2013 Climate Action Plan, and, in particular, the 2014 “Strategy to Reduce Methane.” President Obama stated then that reducing methane emissions is “critical.” Widely viewed as part of the U.S. “quid” for the “quo” of China’s agreement to peak its greenhouse gas (GHG) emissions by 2030, methane reduction will be a focus of administration policy-making for the next two years.

This 2015 announcement is built on the foundation of several earlier actions. In 2009, pursuant to the Clean Air Act (CAA), the EPA issued the “Endangerment Finding” determining that GHG emissions endanger public health. At that time, the EPA identified methane as one of “the two most important, directly emitted, long-lived greenhouse gases.” 74 Fed. Reg. 66,496, 66,517 (Dec. 15, 2009). Methane is considered to be a more potent GHG than CO2. Also in 2009, the EPA issued a mandatory GHG reporting rule under CAA §114. The oil and gas industry began reporting under subpart W of this rule in 2011. As of 2014, subpart W now covers multiple oil and gas facilities and activities including upstream, gathering and boosting, completions and workovers of fracked oil wells, natural gas distributors, pipeline transportation, and blowdowns of natural gas transmission pipelines between compressors. Finally, in April 2014 the EPA issued five technical “white papers” on oil and gas methane and volatile organic compounds (VOCs) emissions covering compressors, completions/productions, leaks, liquids unloading and pneumatic devices.

The EPA’s 2015 proposal is based on the data collected from the 2009 mandatory reporting rule and the analyses in the 2014 white papers. According to the EPA, methane makes up 10% of GHG and of that total, 30% is contributed by oil and gas. The EPA recognizes that the industry has decreased its methane emissions by 16% since 1990, but is focused on a predicted 25% increase over the next decade. As proposed, these EPA measures apply only to new or modified facilities. Environmental groups will push for application to existing facilities while the industry will argue that voluntary actions have a proven record of achievement.

In order to meet the new goal, the White House proposes several initiatives that will be implemented by several federal agencies:

EPA - New Standards for Methane and VOC Emissions - In the summer of 2015, the EPA will be proposing new standards in a rule for methane and VOCs from “new and modified oil and gas production sources, and natural gas processing and transmission sources” for the oil and gas industry. On January 28, 2015, the EPA called for input from oil and gas small businesses, NGOs and states on the development of a rule to reduce methane and VOCs under the CAA New Source Performance Standards. After considering comments from the states, the oil and gas industry and the public, the EPA will issue a final rule in 2016.
EPA - New Guidelines for Reducing VOCs - The EPA will be developing new guidelines and proposing control measures to reduce VOC emissions from oil and gas operations that states could adopt to help meet air quality standards for ozone. The EPA will publish Control Technique Guidelines (CTG) to address options for VOC emissions in ozone nonattainment areas and states in the Ozone Transport Region.

EPA - Enhanced Leak Detection and Reporting - The EPA will be considering remote sensing technologies to improve the accuracy of reported methane emissions.

BLM - Updated Standards on Public Lands - In April 2015 the BLM will be proposing an update to standards (Onshore Order No. 9) for new and existing oil and gas wells on public lands to reduce venting, flaring and leaks of methane. The final Order is expected in April 2016.

DOT - New Pipeline Safety Standards - Later this year, the Pipeline and Hazardous Materials Safety Administration (PHMSA) will be proposing new natural gas pipeline safety standards to reduce emissions.

DOE - Technology and Emissions Quantification - The federal budget for Fiscal Year 2016 includes approximately $25 million in funding for the development of technology to detect and repair natural gas transmission leaks, development of next generation compressors and quantification of natural gas emissions.

Over the next few years, methane emissions may be reduced automatically if low prices for oil and gas persist and production drops. In the meantime, the emissions reducing strategies outlined above will begin to take effect.

EPA Fact Sheet on the Proposal may be found at: http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/ba7961bf631c87bf85257dcd00526ff7!OpenDocument

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