On July 9, 2024, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) declined to stay a new Environmental Protection Agency (“EPA”) rule that seeks to limit methane emissions in the oil and gas industries (“Methane Rule”), thereby allowing the Methane Rule to remain in effect while litigation proceeds.

The Methane Rule, titled “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review,” applies to oil and natural gas production and processing facilities and natural gas transmission and storage facilities. Among other requirements, the Methane Rule imposes flaring restrictions, requires owners and operators to routinely monitor for and repair natural gas leaks, and creates a new “Super Emitter Program” for reporting to the EPA events in which emissions exceed 100 kilograms of methane per hour. The Methane Rule became effective on May 7, 2024, and includes a variety of compliance deadlines.

On March 8, 2024, the State of Texas, the Railroad Commission of Texas, and the Texas Commission of Environmental Quality filed a petition for review of the Methane Rule in the D.C. Circuit. Several other petitioners—including a variety of states and industry participants—subsequently filed additional petitions for review challenging the Methane Rule. The D.C. Circuit has consolidated all proceedings in Case No. 24-1054.

On April 12, 2024, a coalition of twenty-four states and one state legislature (“State Petitioners”) filed a motion to stay the Methane Rule. Approximately one month later, a group of oil and gas industry participants (“Industry Petitioners”) filed their own motion to stay. State Petitioners argued that the Methane Rule is legally unsound, will harm the energy sector, and will unduly diminish the discretion granted to states under the Clean Air Act. Notably, State Petitioners’ motion to stay was signed by new FERC Commissioner Lindsay See, who was serving as the Solicitor General of West Virginia when the motion to stay was filed. Industry Petitioners in turn contended, inter alia, that the Methane Rule threatens reliability and American energy independence and that the EPA failed to adequately consider its impact on low production, “marginal” wells.

The D.C. Circuit denied both motions to stay in a two-sentence per curiam order that does not address any specific arguments, but instead states only that the motions failed to satisfy the “stringent requirements” for a stay. As a result of the D.C. Circuit’s decision, the Methane Rule will remain in effect throughout the pendency of the various proceedings challenging its legality. Entities subject to the Methane Rule will thus need to begin taking steps to comply with it.

The Order can be viewed here.