Reed Smith Client Alerts

The past year has been a busy one in environmental law and policy. While a look ahead could include topics such as likely impacts from continuing efforts by the current U.S. administration to bolster use of coal-fired energy1 or the myriad lawsuits facing the Environmental Protection Agency (EPA) in 2019 from environmental groups and state attorneys general, from a business perspective, developments in air- and water-related litigation and regulation are likely to have the most immediate domestic consequences in the coming year. Examining environmental areas of interest in the macro, climate change lawsuits and policy will continue to factor into everything from investing and insurance, to energy-sector decision-making.

Air – methane and mercury take center stage

2019 promises to continue the trend of rapidly changing and surprising moves by the Trump administration’s EPA as they relate to fossil fuels and air quality. At the center of these intentional shifts from the previous administration’s policy are methane and mercury.

Methane discussions are more than hot air

  • Methane limits and controls were targeted in 2018 by the EPA through an amendment to the 2016 New Source Performance Standards, which would change the monitoring frequency for fugitive emissions, and clarify both design and certification requirements for equipment at well sites and compressor stations.
  • Methane was also targeted by the Department of Interior’s plan to revise the Methane Flaring Rule, which would change the percentage of methane required to be captured at drilling sites, as well as revise measurement of leak detections
  • EPA Administrator Andrew Wheeler spoke in Pittsburgh indicating EPA’s intention to continue examining methane and greenhouse gas emission limits in the context of the Trump administration’s overall goal to reduce regulations, including those on oil and gas facilities.
    • In opposition to this agenda, states are taking the lead in suing EPA over its recent policy and regulatory decisions.
    • 2018 saw numerous state attorneys general threatening to sue EPA over its methane rollbacks, and in one recent example, California and New Mexico (along with environmental groups) will be able to continue an appeal of a District Court’s stay of aspects of the previous administration’s methane rules per a Tenth Circuit Court Order.2
    • 2019 will almost certainly bring more lawsuits from states and environmental groups in response to the Trump administration’s deregulation around methane and other greenhouses gases – a trend that has not escaped EPA’s notice.
  • Coming into a new year, contentious political relationships – both internal to the federal government, and between states and the federal administration – will shape regulation of air toxics and greenhouse gases.
  • One can expect that the ongoing changes of federal regulations, and the potential for individual state regimes, will affect not only markets and investment in fossil fuels, but in day-to-day compliance and enforcement activities.
  • Takeaway: Methane will be a major focus at the federal, state, and local levels in 2019. Understanding which statutes and regulations apply to emissions sources is crucial from a compliance standpoint, and understanding differing policy perspectives is important for effective messaging to achieve business goals.