'Tired of Winning' Yet?

A statue of Lady Justice.

By David J. Hayes
July 23, 2020

Last week, the Trump administration suffered two more major losses on important energy and climate issues. In one, the court identified a now-familiar litany of legal errors in its latest failed attempt at a regulatory rollback. In the other, the court rejected another clumsy administration attack on states’ energy rights.
 
The first case involves the administration’s efforts to nullify restrictions that the Interior Department imposed in 2016 on oil and gas operators’ wasteful venting or burning (flaring) of methane extracted from public lands. In that rule, the Bureau of Land Management (BLM) responded to longstanding concerns by Interior’s Inspector General (and others) that oil and gas lessees were violating the Mineral Leasing Act’s prohibition against wasting valuable public resources by burning methane off or simply venting it into the atmosphere. The companies dump the marketable gas for one simple reason: it gets in the way of more profitable, co-located oil deposits.
 
The Trump administration was happy to do as industry instructed. After a court rejected BLM’s opening gambit to delay the 2016 rule’s compliance obligations, the Interior Department rushed through a “rescission” rule in 2018 that, for all intents and purposes, repealed the 2016 rule. State attorneys general Xavier Becerra and Hector Balderas, representing California and New Mexico, respectively, sued, along with several public interest groups.
 
Last week, in the judicial equivalent of a smack-down, a federal court vacated BLM’s 2018 rescission rule. “In its haste” to repeal the 2016 rule, the court found that BLM “ignored its statutory mandate under the Mineral Leasing Act [to prohibit the waste of natural resources], repeatedly failed to justify numerous reversals in policy positions previously taken, and failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations.”
 
More specifically, echoing many other administration losses in court, the judge ruled that BLM failed to provide a “reasoned basis” for its radical flip-flop on the rescission rule’s regulatory costs (suddenly much higher in 2018 than calculated in the 2016 rule) and benefits (suddenly much lower in 2018). The judge called out a variety of “arbitrary and capricious” actions, including an unacceptable “backwards approach to rulemaking” that relied on “backfill[ing] the record” with thin information provided after the comment period had closed. The court also scolded BLM for failing to address the 2016 rule’s monetization of benefits (based on the peer-reviewed “social cost of methane” calculation prepared by an expert interagency group), noting that a Presidential Executive Order cannot “alter by fiat what constitutes the best available science.”
 
In addition to finding “myriad inadequacies” under the Administrative Procedure Act, the court also lectured BLM for multiple National Environmental Policy Act (NEPA) violations. In doing so, the opinion provides a timely reminder of the importance of NEPA’s command that BLM take a “hard look” at the negative impacts that its rescission rule will have on climate and public health (particularly where, as here, disadvantaged tribal communities are involved), as well as the cumulative effects of adding more methane emissions to BLM’s nationwide oil and gas program. Failing to forthrightly address these important health and environmental impacts — including the climate and cumulative impacts that the administration is now looking to downplay or ignore in its recently-released NEPA rule — constituted “serious [NEPA] violations.”
 
In a second major loss last week, a federal court turned away the administration’s claims that California was infringing on the President’s foreign affairs prerogatives by linking its greenhouse gas cap-and-trade program with the Province of Quebec. The suit fits a disturbing pattern in which the federal government looks to quash state-based environmental initiatives. Other examples include the revocation of California’s rights to set more stringent auto standards, penalizing state support for clean energy in interstate electricity markets, and limiting state authority to object to federal projects that violate state water quality standards.
 
While this administration does not respect states’ environmental rights, state attorneys general are counting on the courts to do so. And that’s exactly what happened in the cap-and-trade litigation. The court dismissed the Justice Department’s action, finding that “the United States has failed to identify a clear and express foreign policy that directly conflicts with California’s cap-and-trade program,” and noting that “California’s program mirrors the many thousands of agreements individual states have entered into with foreign jurisdictions, including those addressing climate change.”
 
And so the fight goes on, with the states continuing to pile up important vindications of state interests against a federal government that surely is no longer, if it ever was, “tired of winning.”


David J. Hayes is a nationally recognized environmental, energy and natural resources lawyer who leads the State Energy & Environmental Impact Center.