Energy expert weighs in on 23 state attorneys general suing EPA

Texas Attorney General Ken Paxton, along with 22 other attorneys general, is leading a lawsuit against the Environmental Protection Agency (EPA) over a new rule that would impose fines on the oil and natural gas sector for exceeding certain methane emissions levels. The GOP states are arguing that the new rule, established in President Biden’s Inflation Reduction Act, is “arbitrary, capricious, [and] an abuse of discretion.” The complaint alleges that the rule is “unlawful” because it exceeds the agency’s statutory authority.

While the Supreme Court has set strict guidelines on how Congress can delegate legislative power, Steve Milloy, a former Trump administration EPA transition adviser and senior fellow at the Energy and Environmental Legal Institute, expressed confusion over how the EPA’s rule bypasses Congress. Milloy pointed to a section of the Inflation Reduction Act that specifically outlines the EPA’s authority to levy a tax and set the tax rate, including a threshold for methane emissions at 25,000 metric tons.

Milloy criticized the new fee on the oil and gas sector, stating that methane is an “irrelevant greenhouse gas” and that the tax would only serve to increase costs for oil and natural gas production. He suggested that the timing of the lawsuit, filed in the final days of the Biden administration, may be a strategic move to pave the way for a settlement with the Trump administration, a tactic commonly used in the green energy debate.

Another lawsuit filed by the Michigan Oil and Gas Association and the American Free Enterprise Chamber of Commerce also challenges the new rule on grounds that it circumvents Congress. The lawsuit explains that facilities in the natural gas and petroleum supply chains must report greenhouse gas emissions if they exceed 25,000 metric tons of carbon-dioxide-equivalent emissions annually.

Michael Buschbacher, a partner at Boyden Gray PLLC representing MOGA and AmFree in their lawsuit, echoed Milloy’s sentiment that legislative action would be necessary to reverse the new methane rule. He emphasized that their legal filings aim to remove burdensome mandates to allow the American energy industry to thrive under the new administration.

While the EPA declined to comment on the pending litigation, the ongoing legal challenges highlight the complexities and controversies surrounding environmental regulations in the energy sector. As stakeholders navigate these issues, it is clear that legislative action will be crucial in shaping the future of environmental policies impacting the oil and natural gas industry.