26 March 2021

Congress Moves to Repeal First Trump-Era Rule

Yesterday, the U.S. Congress started a process that could repeal its first Trump-era regulation pursuant to the Congressional Review Act (CRA). Enacted in 1996, the CRA provides Congress an important oversight tool over federal agencies to rescind certain rules. Majority members in both the House of Representatives and the Senate introduced resolutions disapproving the Environmental Protection Agency’s September 2020 final rule on policy amendments to new source performance standards for the oil and natural gas sector. The 2020 rule, which amended 2012 and 2016 standards, rescinded methane-specific emissions limits and removed two segments (natural gas transmission and storage) that were subject to the prior standards. While EPA was directed by President Biden’s Executive Order 13990 to review the 2020 rule and propose a new rule by September 2021, members of Congress are seeking to accelerate this effort by using the CRA.

The CRA has been used only 17 times since its enactment — once to repeal a Clinton-era rule and 16 times to repeal Obama-era rules. The CRA provides a unique lookback mechanism for Congress to review Trump-era rules within specific timetables. Rules finalized between August 21, 2020, and January 3, 2021, require that a CRA resolution be introduced by April 2 and voted on by the 60th day of the Senate session period, which looks to be mid-May based on the current Senate legislative schedule. Under the Senate “fast track” procedures, a CRA resolution is considered on the Senate floor with a majority vote, subject to 10 hours of debate, and requires a simple majority to pass. Senate Majority Leader Schumer has already indicated that the resolution disapproving EPA’s 2020 methane policy rule will be taken up on the floor after the Senate returns from its spring break recess the week of April 12. The House majority has also indicated it will soon consider the resolution, and if adopted, President Biden is expected to sign it into law.

What this could mean for the oil and gas sector subject to the EPA regulations is uncertain. The CRA prevents an agency from reissuing a rule in “substantially the same form” or issuing a “new rule that is substantially the same” as the disapproved rule. The CRA does not define the phrase “substantially the same,” and no court has ruled on the question. Because the 2020 methane policy rule amended the previous rule, a CRA resolution of disapproval could potentially bring aspects of the previous pre-2020 standards back to life. However, EPA promulgated a separate rulemaking in September 2020 with technical amendments to the 2016 rule, which are still in effect. Accordingly, EPA would need to provide guidance to the regulated community on what regulations govern oil and gas activity. Any future rulemaking may be met with challenges due to limitations in the CRA.

Sidley will closely monitor congressional consideration of these resolutions and any subsequent EPA actions for the oil and gas sector.

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