American Oil and Gas Reporter - September 2024 - 28

Legal Gamesmanship
To maximize their chance of defending
the methane rule and its standards for
new and existing equipment (often called
Quad Ob and Quad Oc), EPA and the
Department of Justice are trying to limit
plaintiffs' ability to accurately represent
their case, explained Elliott, with Spilman
Thomas & Battle.
For practical reasons, Elliott noted,
the U.S. Court of Appeals for the District
of Columbia, which has jurisdiction
over the case, limits the number of
briefs it receives and the amount of
words each brief contains. " We have
upwards of 80 parties involved in this
litigation, " he said. " EPA has proposed
to the court (that) all the industry and
all the red states, if you will, be forced
into one brief limited to 2,100 words,
and they want us to file our brief and
lock in our positions prior to the election,
on Oct. 25. "
That deadline would make it more
difficult for the plaintiffs to change course
or to stay the litigation if Trump ends up
in the White House and the administration
seems open to revising the rule, Elliott
explained.
" We did not think (EPA's timeline)
was fair, " he said. " What we have proposed
is that our initial brief will be due right
before Thanksgiving, Nov. 25. The EPA,
DOJ and those in support of what EPA
has done, their briefs would be due Feb.
14. We also asked for two briefs, where
industry would have one full brief and
the red states would have their own brief
as well. And then EPA would have the
same amount of words, adding our two
briefs together. "
It's important that plaintiffs have the
space and time to describe their issues
with Quad Ob and Quad Oc because of
the regulations' potential consequences,
Elliot suggested. He cited studies that
estimated that the requirements would
force operators to plug 300,000 wells, or
about a third of the United States' producing
wells.
According to Elliott, one of the main
culprits is that the rules treat an aging
well with a single pumpjack like a major
production and processing facility that
warrants stringent leak detection and
repair surveys. " We are advocating that a
small well site has a more reasonable,
cost-effective way of determining leaks, "
he assured.
Revised regulations could allow small
sites that likely have low emissions to
check for leaks using sight, smell and
sound rather than optical gas imaging
cameras, Elliot illustrated. He added that
the regulations should not require small
sites to replace traditional gas-powered
pneumatic controllers with zero-emission
ones because the relatively minor emissions
impact of doing so would not
warrant the extreme cost.
Other Avenues
The industry's advocacy extends beyond
the courts, Elliott assured. For example,
KIOGA is part of a coalition that
has convinced EPA to reconsider some
technical aspects of the methane rule. At
the time of KIOGA's annual meeting,
the reconsideration process had not yet
advanced enough for Elliott to say how
helpful EPA would be.
" The Quad Ob and c issues . . . are
part of a three-legged stool in terms of
taxing and costing (operators) money, "
he acknowledged. " (We also) have Subpart
W, which were revisions to greenhouse
gas emission factors, and that has
been finalized. And then we have a third
rulemaking, the Waste Emission Charge,
that is due to be finalized in December
or January. "
KIOGA is part of a group that filed a
petition with the D.C. Circuit in early
August to challenge the Subpart W provisions,
Elliott mentioned.
Like the legislative panelists, Elliott
lauded the demise of the Chevron doctrine.
Noting that no judge likes to be overturned,
he predicted that precedent would give
agencies and the courts " a reason not to
push the envelope as far on regulations. "
But that is in the future. For now,
Elliott stressed that operators should be
aware that even minor changes to existing
sites could subject those sites to the requirements
for new facilities, thanks to
the methane rule's unusual definition of
modification.
" Normally, in order to have a modification,
you have to have an increase in
emissions associated with that modification, "
Elliott said. " EPA changed that
definition for oil and gas into any modification,
regardless of whether it increases
emissions. "
Since the U.S. Supreme Court has overturned the principle of Chevron deference, the
executive branch will have less discretion when it crafts regulations, says Representative
Tracey Mann (far right) during the congressional panel discussion at the Kansas
Independent Oil & Gas Association's 2024 Annual Convention, held Aug. 18-19 in Wichita,
Ks. Joining Mann on the panel were, from left, KIOGA President Edward Cross, Senator
Roger Marshall, R-Ks., and Representative Ron Estes, R-Ks.
28 THE AMERICAN OIL & GAS REPORTER
Under the new definition for modification,
something as simple as swapping
out a tank or routing an existing well to a
tank battery could move a site from Quad
Oc to Quad Ob, he observed. " It is very
important to understand that Quad Ob
goes back to Dec. 22, 2022 (the date it
was proposed), " Elliott added. " There are
a lot of sources right now that may be
thinking they have five years (before they
need to comply with Quad Oc), and they
may already be subject to Quad Ob. "
The election could offer a reprieve,
Elliott reiterated. " If we have a Republican
administration, I think it would
move very quickly to say, hey, all this
needs to be put on hold. We need to
take a look at it, and I suspect they
would propose modifications to the definition
of a modification, among other
things, " he concluded.
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American Oil and Gas Reporter - September 2024

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