North Dakota Reveals Basic Framework for Challenge of EPA's Quad Oa Methane Regulations for the Oil and Gas Sector
As discussed in this previous post, a number of states and industry groups have taken a stand against the Environmental Protection Agency’s new methane and VOC emissions regulations for the oil and gas sector ("Quad Oa"). North Dakota recently provided additional insight about the claims that it plans to bring against EPA in the U.S. Court of Appeals for the D.C. Circuit.
In its August 22, 2016 Statement of Issues to the D.C. Circuit, North Dakota outlines five grounds for its challenge to Quad Oa. First, it asserts that the regulation is "arbitrary and capricious" and violates Section 111(b)(1)(A) of the Clean Air Act because EPA did not make an independent endangerment finding for the oil and gas source category to support a decision to adopt any standards of performance for methane and greenhouse gas emissions. As noted in this post, Texas identified a similar issue in its statement.
North Dakota also plans to argue that EPA violated multiple tenets of administrative law in promulgating this regulation. Specifically, North Dakota plans to assert both that Quad Oa is unsupported by the administrative record for the rulemaking, and that EPA’s reliance on the "'White Paper' process" was unlawful. The agency developed the five White Papers on methane emissions from various aspects of the oil and gas sector and then solicited comments and external peer review.
North Dakota also plans to challenge EPA’s regulation of hydraulically fractured oil wells. A potentially similar challenge to the Bureau of Land Management’s ("BLM") hydraulic fracturing regulations led a federal judge to invalidate the regulations after concluding that Congress had not given BLM the statutory authority to regulate fracking operations per se (as opposed to air emissions from oil and gas operations). North Dakota was also a party to the BLM challenge.
Finally, North Dakota identifies a constitutional argument that Quad Oa violates the Tenth Amendment and principles of cooperative federalism by "neglecting North Dakota's state regulations and commandeering North Dakota’s state-delegated programs." Federal regulations are rarely overturned on Tenth Amendment grounds.