Wyoming v. United States Department of Interior

The federal district court for the District of Wyoming vacated the bulk of the Waste Prevention Rule promulgated during the Obama administration, holding that the U.S. Bureau of Land Management (BLM) exceeded its authority and acted arbitrarily and capriciously. The Waste Prevention Rule was intended “to reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities” on federal and tribal lands and to clarify “when produced gas lost through venting, flaring, or leaks is subject to royalties.” In 2019, the Wyoming federal court stayed these proceedings challenging the Waste Prevention Rule while a challenge to the Trump administration’s repeal of the rule was pending in the federal district court for the Northern District of California. After that court vacated the repeal in July 2020, the Wyoming federal court lifted the stay. In its order vacating all but two provisions of the Waste Prevention Rule, the court concluded that “a principal purpose and intent” of the rule was to “curb air emissions” and that the Mineral Leasing Act did not delegate authority to the Secretary of Interior to promulgate rules “justified primarily upon the ancillary benefit of a reduction in air pollution, particularly when considered in light of historical context and the comprehensive regulatory structure under the Clean Air Act.” The court also found that BLM acted arbitrarily and capriciously by failing to consider the rule’s impacts on marginal wells, failing to explain and identify support for the rule’s capture requirements, and failing to separately consider the rule’s domestic costs and benefits.

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Five days after a federal district court in California vacated a 2018 rule repealing BLM's 2016 waste prevention rule, four states (North Dakota, Texas, Wyoming, and Montana) moved to lift a stay on litigation challenging the 2016 rule in the federal district court for the District of Wyoming. The Wyoming court granted the motion the following day and ordered the parties to propose an expedited merits briefing schedule premised on completion of briefing by September 4, 2020.

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On April 30, 2018, the district court denied the motion by California, New Mexico, and citizen groups, who had intervened to defend the Waste Prevention Rule, for a stay pending appeal. The court found that the intervenors were unlikely to succeed on the merits of their appeal because the court had acted within the “broad discretionary authority” conferred by Section 705 of the Administrative Procedure Act “upon a reviewing court to preserve the status quo where irreparable injury would otherwise result.” The court also found that the intervenors had overstated the harm that would result from the stay of the Waste Prevention Rule’s phase-in provisions and that the public interest was best served by a stay of those requirements.

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Environmental groups and two states (California and New Mexico) that intervened on behalf of the federal respondents to defend the U.S. Bureau of Land Management’s Waste Prevention Rule appealed a Wyoming federal district court’s order staying implementation of the rule’s “phase-in provisions.” They moved in the Tenth Circuit for a stay pending appeal and also asked the district court to stay its order pending appeal; they argued that their members and citizens would suffer irreparable harm “from the irreversible loss of publicly-owned natural gas and associated emissions of harmful air pollution” and that the court was without authority to enjoin the regulations without having determined that the rule’s challengers had met the four prerequisites for a preliminary injunction. Two states (Wyoming and Montana) and industry groups challenging the rule, as well as the federal respondents, opposed the motion for stay pending appeal.

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On April 4, 2018, the federal district court for the District of Wyoming stayed implementation of “phase-in provisions” of the U.S. Bureau of Land Management’s Waste Prevention Rule and stayed the pending actions challenging the Rule pending BLM’s finalization of a revised rule. The Waste Prevention Rule, adopted by the Obama administration in 2016, restricts the venting and flaring of methane associated with oil and gas development on public and tribal lands. In December 2017, the Wyoming federal court stayed challenges to the Rule, citing BLM’s suspension of certain effective dates and BLM’s ongoing reconsideration and review of the Rule. In February, the federal district court for the Northern District of California enjoined enforcement of BLM’s suspension of the effective dates. On March 7, the Wyoming federal court lifted its stay and ordered briefing on three pending motions: one to establish an expedited schedule for merits briefing, one to suspend implementation of certain provisions of the Waste Prevention Rule, and one to grant a preliminary injunction or vacatur of certain provisions of the rule. In its April 4 order, the Wyoming federal court noted that BLM’s proposed revisions to the Rule would substantially change the phase-in regulations that were at the “heart” of this litigation and that “[t]o force temporary compliance with those provisions makes little sense and provides minimal public benefit, while significant resources may be unnecessarily expended.” The court said that “to preserve the status quo, and in consideration of judicial economy and prudential ripeness and mootness concerns,” a stay of the phase-in provisions and the challenges to the Rule while BLM completed its rulemaking was the “most appropriate and sensible approach.”

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In addition, two trade groups asked the Wyoming court either to bar BLM from enforcing the Waste Prevention Rule’s core provisions or to exercise its equitable powers to vacate the core provisions until BLM completed its rulemaking process.

Montana and Wyoming filed a motion seeking to lift the stay and also seeking immediate suspension of the implementation deadlines.

A few days after a California federal court issued an order enjoining enforcement of the U.S. Bureau of Land Management's rule that suspended and delayed its Waste Prevention Rule, North Dakota and Texas asked the Wyoming federal court to lift a stay that the court had imposed in December 2017. The two states said the circumstances providing a basis for the stay (i.e., BLM’s expressed intent to change the regulations and its rule delaying the regulations’ effectiveness) no longer existed after the California court granted the preliminary injunction. The states said the Wyoming federal court should complete its review and do so on an expedited basis to prevent harm to the parties even though BLM published a proposal to revise and rescind certain requirements of the rule on February 22.

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In late October, Western Energy Alliance and Independent Petroleum Association of America filed a motion for preliminary injunction in the lawsuit challenging the U.S. Bureau of Land Management's (BLM’s) methane waste rule in the federal district court for the District of Wyoming. The rule requires that measures be taken, beginning in January 2018, to reduce venting and flaring from oil and gas production on federal and tribal lands. The court denied an earlier motion for a preliminary injunction in January 2017. The two trade groups contended that injunctive relief was warranted because their members were suffering “increasingly immediate and irreparable harm” as the compliance deadline approached. The trade groups also argued that the rule was unconstitutional and outside BLM’s authority, and that the balance of the equities and public interest also favored an injunction.

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On January 16, 2017, a Wyoming federal court declined to issue a preliminary injunction staying the effective date of the United States Bureau of Land Management’s (BLM’s) final rule related to the reduction of waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on federal and Indian lands. The rule went into effect on January 17, 2017. It has been identified by congressional Republicans as one of the regulations they would like to use the Congressional Review Act to overturn; the House of Representatives <a href="http://columbiaclimatelaw.com/climate-deregulation-tracker/house-votes-to-overturn-blm-methane-rule/">approved</a> a resolution to repeal the rule on February 3, 2017. The court found that the petitioners had not shown a “clear and unequivocal right to relief” because the court was unable to conclude that the rule’s provisions “lack a legitimate, independent waste prevention purpose or are otherwise so inconsistent with the [Clean Air Act] as to exceed BLM’s authority and usurp that of the EPA, states, and tribes.” Though the court questioned whether the “social cost of methane” was an appropriate factor to consider in issuing a “resource conservation rule” pursuant to the Mineral Leasing Act, the court said it could not conclude “at this point” that the rule was arbitrary and capricious. The court also found that the petitioners had not established that irreparable injury was likely. The court noted, however, that a preliminary injunction would not necessarily have been adverse to the public’s interest in resource conservation and air quality since BLM already had other waste prevention regulations in place and a preliminary injunction would “sidestep the costly implementation of duplicative and potentially unlawful regulations.”

Both sets of petitioners have asked the court for a preliminary injunction, and the court scheduled a hearing on the requests for January 6, 2017. The states argued that they would suffer “immediate sovereign and economic harm” should the rule go into effect and that BLM would experience no actual harm if the court issued a preliminary injunction. The states argued that an injunction was in the public interest because it would prevent an illegal program from taking effect and because the injunction would not harm the interest in a clean environment or cause waste of federal minerals since the states were already taking action to control emissions.