By Stan Parker

 Law360, New York (August 2, 2016, 8:43 PM ET) ­­ The coalition challenging new U.S. Environmental Protection Agency regulations on methane emissions swelled in size Tuesday, with more than a dozen states and a host of fossil fuel industry groups asking the D.C. Circuit to review the rule.

North Dakota in July became the first to sue the EPA over the rule, a key part of the Obama administration’s efforts to slash methane emissions from the oil and gas sector. Texas followed suit last week, and on Tuesday, West Virginia led a coalition of 14 states in asking the D.C. Circuit to set aside the rule. The Independent Petroleum Association of America led a group of 18 other industry groups in a separate petition, and the Western Energy Alliance filed its own suit.

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said in a Tuesday statement that oil and gas producers, some of whom are barely remaining solvent in a time of low prices, can’t afford another regulatory burden.

“The cost of compliance with unjustified regulations with no rational cost to benefit ratio is simply destroying the industry in West Virginia and the entire region,” Burd said in the statement.

The rule, published in the Federal Register in June, will require oil and gas companies to find and repair leaks, capture gas from the completion of hydraulically fractured wells, limit emissions from new and modified pneumatic pumps and restrict emissions from several types of equipment used at gas transmission compressor stations, including compressors and pneumatic controllers.

The states and state agencies joining West Virginia in its petition are Alabama, Arizona, Kansas, Kentucky, Louisiana, the Michigan Attorney General’s office, Montana, Ohio, Oklahoma, South Carolina, Wisconsin, the Kentucky Energy and Environment Cabinet and the North Carolina Department of Environmental Quality.

The rule will reduce methane emissions by 520,000 short tons — equivalent to 11 million metric tons of carbon dioxide emissions — by 2025, as well as 210,000 tons of emissions of ozone­ forming volatile organic compounds, or VOCs, according to the EPA.


The final rule updates the 2012 New Source Performance Standards to address methane and VOCs for sources covered in that rule. The rule also requires industry to reduce VOC and methane emissions from fracked and refracked oil wells, which the EPA said can contain significant amounts of natural gas along with oil.


Among the changes from the proposed rule are the removal of a leak­monitoring exemption for low production wells, increasing the number of times compressor stations must monitor leaks from two times a year to four times a year and giving companies six months from the time the final rule is published in the Federal Register to install so­called green completions — technology that captures and treats gas and liquid hydrocarbons that can later be sold, as opposed to flaring, or burning off their emissions — on fracked oil wells.


A Western Energy Alliance spokesman told Law360 in a Tuesday statement, “Since our and other


trades’ original judicial challenges in 2012, industry has been working with EPA to refine the new source rules and court action has been put on hold. Now that EPA has finalized the latest rule, we’re preserving our ability to challenge the fundamental issue of whether EPA has the authority to regulate methane in the manner it has.”


The litigation effort challenging the rule was met with criticism from the Environmental Defense Fund, an environmental advocacy group.


“It’s unfortunate that these states and industry groups are using resources to challenge these commonsense protections, when instead America should be cooperating to address threats to our climate and air,” Environmental Defense Fund attorney Peter Zalzal said in a statement.


The EPA does not comment on pending litigation.


Western Energy Alliance is represented by John R. Jacus and Eric P. Waeckerlin of David Graham & Stubbs LLP.


Independent Petroleum Association of America et al. are represented by James D. Elliott of Spilman Thomas & Battle PLLC.


The lead case is State of North Dakota v. United States Environmental Protection Agency, case number 16­1242, in the U.S. Court of Appeals for the D.C. Circuit.

­­Additional reporting by Keith Goldberg. Editing by Kelly Duncan.

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