Full Report from Casper

by Kathleen Sgamma, President on January 10, 2017 - 2:32pm

courtroomAs Woody Allen once said, 80% of life is showing up. While I might put that percentage a bit lower, it certainly does give you a whole different perspective to actually be in the court room and listen carefully to all the details, analyze the body language of counsel for both sides, and assess the reaction from the judge. Being fully present provides much deeper insight than just reading the briefs, rulings, and even the full transcript.

That certainly was the case for our preliminary injunction hearing last Friday in Casper on the BLM venting and flaring rule. Whether because temperatures hovered around zero or because it went from 1:00 to 5:45 on a Friday afternoon, the courtroom was only half full. That’s in contrast to the BLM hydraulic fracturing rule hearing last June when the courtroom was jam packed. I believe that Mark Watson, Wyoming Oil and Gas Conservation Commission supervisor and I are the only ones to observe the full hearings for both rules.

The hearing was remarkably similar to the fracking rule hearing. The same Obama-appointed judge who ruled so favorably for us on the fracking rule was again presiding. However, there were a few key differences. The government was much better prepared. The Department of Justice (DOJ) attorneys did not treat this as a slam dunk, and did not just act as though the federal government automatically commands deference.

Although DOJ’s arguments were much more developed, they didn’t seem to convince Judge Skavdahl definitively that the air quality regulation elements of the rule are ancillary to the waste components. Neither side disputes that BLM has authority to regulate waste under the Mineral Leasing Act. The major issue is whether, as Western Energy Alliance, IPAA and the state plaintiffs argue, BLM has usurped Clean Air Act authority which resides only with EPA and the states, or whether, as the federal government argues, it can regulate air quality under existing authority.

The judge asked many more questions this time around, and it was possible to discern his main line of thinking. He asked every attorney on both sides several different times each with several different permutations to explain how this rule is not primarily an air quality rule. At several points the defense seemed to help make our case by agreeing it's basically an air quality rule. I'm convinced that this is the fundamental issue the judge is grappling with.

The defense seemed to be making the point that companies will not suffer irreparable harm because of the phased implementation of the rule, and tried to brush aside our company declarations claiming they would incur immediate costs. Our lead counsel, Eric Waeckerlin, did a great job of rebutting that point at the end on behalf of industry, and Paul Seby representing North Dakota did so as well on behalf of the states. Despite the environmental group intervenors’ best efforts to make that a major issue, Judge Skavdahl did not explore it in depth. Perhaps we can surmise that because he spent so much time on the merits of the case and less on the irreparable harm question, he believes we plaintiffs have already met the irreparable harm threshold necessary to issue a preliminary injunction.

The funniest moment came when the attorney for the California Air Resources Board, intervening on behalf of BLM, was arguing that the states need this federal regulation and can’t do it themselves, a point contrary to what Wyoming, Montana and North Dakota had just argued the prior hour. Judge Skavdahl noted the difference in philosophy and said “Welcome to Wyoming.” One subtly funny point that didn’t cause the courtroom to burst into laughter was when he asked counsel for the New Mexico Attorney General, who intervened along with California at the last minute and without having participated in the rulemaking, whether other state agencies had submitted comments contrary to his position. I chuckled inwardly when he had to admit that that was indeed the case. Judge Skavdahl is very perceptive and diligent, and had clearly ready our opposition to California and New Mexico intervening on behalf of BLM. The New Mexico AG specifically is intervening in a position contrary to the Governor, the Commissioner of Public Lands, the Environment Department, and the Oil and Gas Conservation Division, all agencies which actually participated in the rulemaking process.

Companies are struggling with how to start implementing this rule to be ready for the January 17th effective date. The judge could rule on our preliminary injunction this week or right down to the wire on the 16th. Even if he does not grant a preliminary injunction, we feel confident about our chances during the proceedings on the full merits of the case.

On another front, Congress has clearly signaled that it wants to create jobs by rolling back many last-minute regulations from the Obama Administration. Indications are good that Congress is seriously considering this rule, finalized in late November, as one to overturn using the Congressional Review Act. We urge Congress to overturn this costly, ineffective and unlawful rule. 

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