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Motions Denied to Stay, Dismiss Appeal of Natural Gas Venting/Flaring Rule

Legal wrangling over an Obama-era rule governing associated natural gas flaring and venting on public and tribal lands will continue, for now, after a divided federal appeals court denied two motions by the rule's supporters for a stay, and two motions by its opponents for a dismissal.

A three-judge panel of the Tenth Circuit Court of Appeals in Denver on Monday denied motions for a stay of the Interior Department's Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule, aka the venting and flaring rule.

The motions were filed last April by California, New Mexico and a coalition of 16 environmental groups following a ruling by Wyoming District Court Judge Scott Skavdahl. Skavdahl ruled that the phase-in provisions of the rule should be placed on hold to give Interior's Bureau of Land Management (BLM) more time to ultimately revise or rescind the rule.

"The appellants have failed to demonstrate that the stay factors weigh in their favor, and we are not convinced that the circumstances justify an exercise of this court's discretion," Chief Judge Timothy Tymkovich and Judge Jerome Holmes wrote for the majority. Judge Scott Matheson Jr. dissented, saying he favored remanding the case back to Skavdahl "to explicitly analyze...whether the rule should be stayed before this court decides the motions for stay pending appeal."

However, the three appellate judges dismissed motions by Wyoming, Montana, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance (WEA) to dismiss appeals by the rule's supporters. They had argued that Skavdahl's ruling is not reviewable by the appellate court because it is not an injunction.

The Skavdahl ruling “has the practical effect of granting an injunction," the judges wrote. "It results in a serious, perhaps irreparable, consequence in that the environmental benefits of the rule will not be realized; and it can be challenged only by an immediate appeal."

Both sides in the case now have until June 19 to file a proposed briefing schedule. The appellate court case is State of Wyoming et al v. DOI et al, No. 18-8029.

WEA President Kathleen Sgamma told NGI's Shale Daily that the organization was pleased with the ruling, but conceded "we weren’t really sweating this one. The environmental groups and liberal AGs [attorneys general] had a high bar to hurdle convincing the Tenth Circuit to reinstate a rule that will be substantially rewritten in a few months.

"Time is on our side. Having ruled on these motions, the appeal now moves to the merits, but briefing will take about as long as BLM will take finalizing the rule. We could have a situation of briefing being done just as the new rule is published, making the entire case moot. As with the hydraulic fracturing rule, the circuit court doesn’t want to waste its time hearing the merits of a case for a rule that’s being completely changed."

Last February, environmental groups had prevailed in U.S. District Court for the Northern District when Judge William Orrick rejected a proposed rule by the BLM to delay enforcement of parts of the venting and flaring rule until next January. AGs for California and New Mexico were parties to that lawsuit.

IPAA and WEA filed a lawsuit against the rule in Wyoming district court in November 2016. Montana and Wyoming filed a separate lawsuit, and North Dakota and Texas subsequently joined as petitioners. The two lawsuits were combined at the end of November.

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